After spending almost entire day and trying out all the possible solutions, as of July 17, 2017, the above solution does not work.
For me, I wanted to replace /etc/nginx/conf.d/elasticbeanstalk/00_application.conf
I created the below shown folder structure in my .ebextension folder and the file was overwritten with my content. This solution also worked for nginx.conf which is located in /etc/nginx folder