The property file: qt_defaults.props sets AND overrides the property $QtBuildConfig based on the condition: Condition="'$(Configuration)' == 'debug'.  When $(Configuration) == 'debug' then $QtBuildConfig is set to 'debug" otherwise it's set to 'release".  The problem is when the $(Configuration) is not debug, but the project is still a debug project.

Was able to fix this by changing the following lines in qt_defaults.props:

// code placeholder
    <!--// Qt build config -->
    <QtBuildConfig Condition="'$(Configuration)' == 'Debug'">debug</QtBuildConfig>
    <QtBuildConfig Condition="'$(QtBuildConfig)' == ''">release</QtBuildConfig>

However, each time the VSTools extension is used to create a new project, qt_defaults.props is rebuilt.