Here's an example using Angular 1.2 RC3:
http://plnkr.co/edit/LMF2YuJW1Opj9gS3wv63?p=preview
If you open the JS console you can see what the observed value is. It's uninterpolated with its curly braces still intact.
Here's the same code running on Angular 1.0.8 that works correctly:
http://plnkr.co/edit/E0vINw7Pyjk0G2I1UwBI?p=preview