currently when I am in mirror mode and I disconnect display, i exit mirror mode. However when I reconnect to external display - i'm back to mirror mode. I think that behavior makes sense and I would keep it AS IS. 

with 2 or more external displays in mirror mode, if one is disconnected, I would continue mirroring the 2nd one. Once the 1st display is reconnected - mirroring is applied to 2 external displays. Let me know if there is corner case I'm not thinking about. 

What happens if the source display is disconnected, should we end the mirror mode, or re-elect the source?

let's stick to current logic you described in original description - and revisit it later. 

sounds good to me, thx.

Should be fixed by this already.