You need to tell angular that you updated the var:
function TestCtrl($scope) {
$scope.loading = true;
setTimeout(function () {
$scope.$apply(function(){
$scope.loading = false;
});
}, 1000);
}
or just
function TestCtrl($scope, $timeout) {
$scope.loading = true;
$timeout(function () {
$scope.loading = false;
}, 1000);
}