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The issue is, only adding nugget would not suffice. You need to install slowcheetah from visual studio marketplace. Following are the steps:

  1. Install SlowCheetah from Tools > Extensions and Updates
  2. Restart VS, allowing for the VSIX installer to run
  3. Create new C# App (.NET Framework). (In my case, it started to work on existing app also.)
  4. Show ALL Files in Project and you will see the Transformations

You will then also see the Transformation files in the Project file as explained below.

Unload the project and then Edit the project. Find the ItemGroup element that contains your newly created config file and add the <DependentUpon>Web.config</DependentUpon> element there, like so: