Currently if you convert a Handle 'Logon' Dialog step into coded step, Test Studio generates the following code:
        [CodedStep(@"Handle 'Logon' dialog.")]
        public void WebTest_CodedStep1()
        {
            // Wait Until Dialog is Handled          
            WaitUntilHandled(5000);    
        }

This code will fail as expected, but is really confusing for the customers, because they expect this step to handle the dialog.