I remember the issue where Destiny died. The Reavers invaded Muir Isle, and Freedom Force (the Brotherhood of Evil Mutants) stopped them with Forge. At the end of the issue, Mystique thinks the Reavers did it, but blames Forge for leaving Destiny alone.
Exactly how Mystique figured out Legion did it, I don't know. Actually, they never said why Legion killed Destiny. Presumably he had a reason, even a crazy one.