Ok, here is the answer, in case someone land here by search engines.
I got the answer from the author Scott Durow himself. I posted the question here
https://ribbonworkbench.uservoice.com/
Here is his answer:
Scott: The Ribbon Workbench will only open unmanaged solutions – do you have only managed solutions?
Me: So I always need to create an unmanaged solution, add an entity. Then ribbon workbench can change the ribbons belong to entities inside the unmanaged solution and changes will be saved inside the same unmanaged solution. Correct?
Scott: Yes – you’ve got it!
Cheers!