yeah, that's totally fine. Our test solution has many generated projects so it works OK You should look into changing Connection string key name pattern under 'Entity model -> code generation' in the project settings so they both use a unique connection string name, so you can have two connection strings in your application's config file without a problem. If they connect to the same database server, you can of course keep the default and just use 1 connection string.
If you need to use e.g. DataAccessAdapter of two projects into one class, you can alias one or both using the 'using' statement in C#, so you don't get a conflict
One caveat: the framework static variables defined on e.g. EntityBase2, are global per appdomain, so setting them in 1 project also means they're used in the other. In general this is OK though as they're not used a lot and are global anyway.