That template is processed by ERB at the time you run generator, and the result will be stored in your Rails project.
It means in your Rails project only the result file is stored and executed. In the Rails codebase templates for generator uses a .tt
extension, that makes more explicit that the file is just a template and will not be stored verbatim in your project.
In other words, your project will not contain this template as it is, but the result applied to the context where you run the generator. For instance,
class DeviseCreate<%= table_name.camelize %> < ActiveRecord::Migration
will become
class DeviseCreateUsers < ActiveRecord::Migration