Adding parameters to var() on a section

I have created a spacing parameter for a section component. Options are none, xs, s, m, l, xl. these simply output those same values. I am trying to add the output to a variable I setup in CSS.

When I add the variable directly to the padding top or bottom like var(--space-m) it renders on the front end just fine.

When I try to add the parameter to the variable like this var(--space-{{dc.p.sectionPadding}}) everything starts getting output weirdly. it tries to add a style tag in the HTML markup to the section or tries to add the same style to all 4 (top, bottom, left and right) fields. I tried adding this in breakout mode and it still did not work.

What am I missing here? How can I add the parameter output to the var()?

I have also noticed that the 2 input fields (top padding and bottom padding) look different as well. One has an arrow with the dynamic content icon. the other does not. What is the difference in these 2 fields (icon vs no icon)?

Component parameter JSON

{
  "sectionPadding": {
    "type"		: "choose",
    "label"		: "Padding",
    "initial"	: "m",
    "options"	: [
      { "value" : "none", "label" : "-" },
      { "value" : "xs", "label" : "XS" },
      { "value" : "s", "label" : "S" },
      { "value" : "m", "label" : "M" },
      { "value" : "l", "label" : "L" },
      { "value" : "xl", "label" : "XL" }
    ]
  }
}

Global CSS

  :root {
    --space-xs: clamp(0.875rem, 0.8533rem + 0.1087vw, 0.9375rem);
    --space-s: clamp(1.125rem, 1.0815rem + 0.2174vw, 1.25rem);
    --space-m: clamp(1.6875rem, 1.6223rem + 0.3261vw, 1.875rem);
    --space-l: clamp(2.25rem, 2.163rem + 0.4348vw, 2.5rem);
    --space-xl: clamp(3.375rem, 3.2446rem + 0.6522vw, 3.75rem);
  }