Steele fires an advanced homing missile at Leebo And hits.

How do each of there abilities resolve?

Steel draws three and choose one to hand to Leebo. Leebo draws an other one and choose one of the two to keep.

Smuggler is correct. It's a lot of fun to do. Slightly more ridiculous if Leebo has determination.

As Smuggler says and the scuff elaborates on. When Marrak would give a ship a face-up card he gets to pick from the next three cards; the two that aren't chosen then go to the discard pile. After Leebo gets handed the Face-up card he gets to pick up another and then keep one and put the the other in the discard pile. If Leebo happens to have Determination and the card he picked to keep is a Pilot card then Determination will immediately send it to the discard pile as well.

In this situation a total of four cards will be drawn with three of them going to the discard pile. Also note that this happens for EACH face-up card that would be drawn to if Marrak's attack would end up dealing two face-up cards you would resolve each of them one at a time leading to EIGHT cards coming out of the damage deck.

PS. With all of these cards coming from the DD you may worry about running out but if that were to happen you just shuffle the discarded damage cards and create a "new" deck.