Well they were probably losing prior to GA's death, and the Imperial army didn't hold together too well on the retreat. But maybe my wording wasn't quite right - 'significant' may not have been the best word.
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The battle was fought in fog and both Gustavus Adolphus and Pappenheim (the Imperial cavalry-commander and second-in-command) were killed.
Losing a great leader already carries a hefty penalty - having to use one of the faceless 'generic' leaders. What is annoying is that great leaders and monarchs come to power and die on the same day regardless of what else happens to them. But it's part of the game and unlikely to change.
The death of a monarch might - or might not - be an occasion for grief and stability loss. Many peasants, merchants and even nobles might either not care or go dance in the streets with joy. Only with an usurpation and/or civil war might you get country-wide stability loss.
If many rapid changes in the monarchy is destabilizing, there is or should be an event to accomplish that effect.
