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Starting from Vegas Pro 17, there’s a new experimental feature called the MKV reader. This feature lets you bring in MKV files directly into your editing timeline. However, there’s a condition: the video codec used in the MKV file needs to be supported for this to work smoothly.
You can firstly enable this feature. If it doesn’t work still, then it means the video/audio codec of the MKV file isn’t supported by Vegas Pro. In that case, you can use Shutter Encoder, Handbrake, or other video converter (just search into the best video converter, you can find a lot of such tools) to transcode the file to MOV ProRes or other formats that Vegas Pro can well handle with.