Descriptive Problem Summary:
Using the map editor's "Generate Instances from Icon-states" option does nothing if the object's icon_state does not exist in the icon file

Numbered Steps to Reproduce Problem:
Make an icon file and fill it with named states
Define an object and assign it the icon file
Do not set the object's icon_state to any of the states in the icon file
Attempt to generate instances from icon-states in the map editor
Nothing happens

Set the object's icon_state to one that is in the icon file
Attempt to generate instances from icon-states in the map editor
Instances are created for each state