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Generate event handlers error: "Cannot create method in the associated activity"

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Issue

The following 'generate event' error appears: "Cannot create method in the associated activity. Make sure a class with this activity name exits."

Symptoms

This happens when trying to generate client event (and other events) handlers.

Troubleshooting Steps

If the server has March 2018 CU installed, please install March 2018 CU on the client machine to resolve the issue.
If the March CU is already installed on both server and client machines, run devenv /setup on the client machine with an admin account to reset Visual Studio.