I found the reason.
When I first created my theme i did not use the codegen theme command line utility. Instead I just copied the ThemeMachine folder and edited the results. So even though I was able to install my theme and see it work visual studio would not recognize
it for some reason.
Anyway, I used the command line tool and copied all my files there including the filter and it does indeed stop at the breakpoint.
I think all is well now so I should be able to create alternate layouts now... i hope! ;)
thanks again for the help