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Well, if we are guessing, I would say that a "legendary" hero death would be the death of a hero who holds a council position or possibly a title of Duke/Duchess.
I got it with a character years and years ago that was neither a lord or a council member. Guess again!
Legendary Hero status has been my belief that it requires over 100 honour. Gilth received the points when he died. He had only ever been a knight, not even a region lord.
I just got a fame point this morning and no important thing happened except one of my character gained a point of honour from battle and the total family honour became 110.
Is it possible you just noticed it but it happened earlier? I certainly don't check my fame on a daily basis. Anything significant happen in the past week(s)?