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This is a VS Code false positive, not a code error: the built-in HTML language support validates the style attribute as static CSS and does not understand LWC's {style} template binding. It is safe to ignore — deployment works despite the squiggles. To silence it, turn off HTML CSS validation in VS Code settings: Extensions > HTML > Validate: Styles ("Controls whether the built-in HTML language support validates embedded styles"). Two later users confirmed this workaround helped. Source: https://github.com/trailheadapps/lwc-recipes/issues/122
Source: https://github.com/trailheadapps/lwc-recipes/issues/122