Component used: Navigation
Version used: android.arch.navigation:navigation-safe-args-gradle-plugin:1.0.0-alpha11
Devices/Android versions reproduced on: not related to device/api version, it is code generation problem
Bug description:

navigation file defined like this:
<?xml version="1.0" encoding="utf-8"?>
<navigation xmlns:android="http://schemas.android.com/apk/res/android"
xmlns:app="http://schemas.android.com/apk/res-auto"
xmlns:tools="http://schemas.android.com/tools"
android:id="@+id/nav_graph"
app:startDestination="@id/homeFragment">

<fragment
android:id="@+id/homeFragment"
android:name="no.amedia.newsapp.android.WebPageFragment"
android:label="fragment_home"
tools:layout="@layout/fragment_web_page" >
<argument
android:name="web_url"
app:argType="string"
android:defaultValue="@string/url" />
</fragment>

<action android:id="@+id/action_global_homeFragment"
app:destination="@id/homeFragment" />

....
</navigation>

where url (referenced as "@string/url") is defined as <string name="url" translatable="false">https://google.com</string> in strings

generates code like this:
class NavGraphDirections private constructor() {
private data class ActionGlobalHomeFragment(val webUrl: String = "@string/url") :
NavDirections {
override fun getActionId(): Int = no.amedia.newsapp.android.R.id.action_global_homeFragment

override fun getArguments(): Bundle {
val result = Bundle()
result.putString("web_url", this.webUrl)
return result
}
}

companion object {
fun actionGlobalHomeFragment(webUrl: String = "@string/url"): NavDirections =
ActionGlobalHomeFragment(webUrl)
}
}

so the problem is webUrl: String = "@string/url" instead of webUrl: String = "https://google.com" or some dynamic reference to @string/url

the same is with WebPageFragmentDirections generated class:
class WebPageFragmentDirections private constructor() {
companion object {
fun actionGlobalHomeFragment(webUrl: String = "@string/url"): NavDirections =
NavGraphDirections.actionGlobalHomeFragment(webUrl)
}

when I try to use code like this
navController.navigate(WebPageFragmentDirections.actionGlobalHomeFragment())
or
navController.navigate(NavGraphDirections.actionGlobalHomeFragment())
argument value in the fragment is "@string/url" instead of "https://google.com"
while if I navigate like this
navController.navigate(R.id.homeFragment)
default value from navigation xml is used correctly and I get "https://google.com"

I hope that I manage to describe the problem in a proper way, it is very simple to reproduce, but if you have any questions just ask