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Sen let slip three game points in the opening game and then threw away a 7-0 lead in the second game.
This was Prannoy's second career win over Axelsen, whom he had beaten during the Indonesia Masters last year.
Axelsen won 21-10, 21-15 in the title match.
It was a memorable performance from the world No. 12 Indian as he recorded his first win over his highly-fancied rival who has a 4-0 head-to-head record before Saturday's match.
It was the Indian's first final in a BWF world tour event in 17 months. He last won a title at the 2017 French Open.
Results 1-5
