1. Even though the "Add Merge Markers to Existing Source Elements" checkbox is unchecked, the markers are added to the
whole source. 
2. The original source file was also replaced by a totally newly generated source. 
3. After code generation, navigate to source opens the new source from #2 in a separate source editor side by side with
the original source.

Repro steps:
- create a uml java-platform project
- create a java project
- from the java project, create a new class and add a new attribute and a new operation to the class
- save and reverse engineer the class to the uml project created above
- create a class diagram in the uml project
- drag and drop the re'ed class to the class diagram
- add a new operation to the class from the class diagram
- generate code for the class with the default options ("Add Merge Markers to Existing Source Elements" should be
unchecked while "Generate Markers for Source File Merging" is checked)
- navigate to the source and note that markers are generated in the original source

Here's the original class in the java project:
/*
 * NewClass.java
 * 
 * Created on Jul 9, 2007, 5:29:57 PM
 * 
 * To change this template, choose Tools | Templates
 * and open the template in the editor.
 */

/**
 *
 * @author peter
 */
public class NewClass {

    private int at1;
    
    public NewClass() {
    }
    public void oper1(int p1){
        at1 = p1;
    }

}


Here's the generated class after adding oper2():

/**
 *  @author peter
 */
// <editor-fold defaultstate="collapsed" desc=" UML Marker "> 
// #[regen=yes,id=DCE.70D94DA7-CF2A-7884-CBB5-0769611D50FB]
// </editor-fold> 
public class NewClass {

    // <editor-fold defaultstate="collapsed" desc=" UML Marker "> 
    // #[regen=yes,id=DCE.C58CB62A-EE42-6404-6464-90FE1F39236F]
    // </editor-fold> 
    private int at1;

    // <editor-fold defaultstate="collapsed" desc=" UML Marker "> 
    // #[regen=yes,id=DCE.526E7A08-9DBC-1988-4C57-98F38EA41A6D]
    // </editor-fold> 
    public NewClass () {
    }

    // <editor-fold defaultstate="collapsed" desc=" UML Marker "> 
    // #[regen=yes,id=DCE.F4B3E3E7-8C47-A030-7D3B-AD1B5DBF11FD]
    // </editor-fold> 
    public void oper1 (int p1) {
    }

    // <editor-fold defaultstate="collapsed" desc=" UML Marker "> 
    // #[regen=yes,id=DCE.FCF7C4F3-5520-9BFC-AE40-7B5E41EADBDD]
    // </editor-fold> 
    public void oper2 () {
    }

}