I have reproduced in my environment and below are my observations:
Firstly, I have faced a similar issue as you have like below and the design is not saving with scope and when i worked with VS code and Standard Logic apps before sometime, it worked correctly for me, so this may be a bug and I guess it will be updated by VS code team.
The below designing is not been saved:

But one the of the workaround to work with Logic apps in VS code is by using workflow.json
and with the use of below code it saved my logic app and in the design i am able to see the updations:
{
"definition": {
"$schema": "https://schema.management.azure.com/providers/Microsoft.Logic/schemas/2016-06-01/workflowdefinition.json#",
"actions": {
"Scope": {
"actions": {
"Compose": {
"inputs": "Hello Rithwik",
"runAfter": {},
"type": "Compose"
}
},
"runAfter": {},
"type": "Scope"
}
},
"contentVersion": "1.0.0.0",
"outputs": {},
"parameters": {},
"triggers": {
"manual": {
"inputs": {
"schema": {}
},
"kind": "Http",
"type": "Request"
}
}
},
"parameters": {}
}
Now the logic app has been saved:

NOTE:
As of today this is an issue(bug), so try to use code first approach rather than design first approach to play around with Logic apps in VS Code.