**This was fixed in the VS 2012 Update. You can get it from:
- Create a project
- Add a project folder ("Models")
- Add a new .edmx ("Model1") into the project folder
- Add an entity ("car") and save.
A new Car.cs file under Model1.tt, as well as related updates to Model1.Context.cs
No updates to generated code
- Right click on .tt file and select "Run Custom Tool"
- Drag .edmx out of the project folder