I have got a Web.Release.config that is successfully transforming a connection string.
When I add a microsoft.identityModel section I get a warning saying
This appears to be working now with Visual Studio 2012 (v4.5.50709). I still get the 'attribute is not declared' warning in the editor, but the xdt:Transform="Replace" directive is working for me.
I've run into this also but have gotten it to work. What I did was a "RemoveAll" and an "Insert" instead of a replace/match:
<audienceUris>
<add xdt:Transform="RemoveAll" />
<add value="http://example.com/" xdt:Transform="Insert" />
</audienceUris>
When I do it that way I get the desired transform and output config file.