I was about to submit this question that I found an answer for that, anyway worth sharing it.
I have a dbml file named for example sample.dbml and I expect the file generated to contain designer class to be sample.designer.cs whereas it becomes sample1.designer.cs. There is no file named sample.designer.cs already in the folder so I am confused why this happens.
This happened when I dragged my .dbml file from a project to another one. I do not know where it keeps the track of the generated filename but by editing the filename in the project file (unloading the project and editing its markup manually) the issue is fixed.