The original Sass compiler was written in Ruby, which made it really slow. Libsass is a rewrite of the compiler in C++, which makes it insanely fast.
The official Sass compiler is now written in Dart and it's almost as quick as Libsass. It also gets new features, such as the new module system, first. As a result, Dart Sass is now the default Sass compiler in CodeKit.
Libsass was the default compiler until April 2020. It remains in the app for backwards-compatibility with older projects. CodeKit will not automatically switch existing Libsass projects to the new Dart Sass compiler.
First, make sure you've read Setting Language Options.
Libsass can be turned on for a single Sass file by selecting that file in the list and choosing "Libsass" from the Compiler pop-up button in the inspector pane.
You can also enable Libsass for all Sass files at once. Open Project Settings > Sass and select the "Libsass" option from the compiler popup button.