My question is this. If this legislation is coming down the pipe, potentially in many nations, could this mean that a Dash Masternode which facilitates coin mixing also becomes illegal (in any nation using the Quatar conference recommendations as a template for AML legislation)?
I've said this already many times, and I will repeat it here. Crypto currencies are an anarchist concept, simply because their basis is trustlessness, which is incompatible with central authority (which imposes that one trusts it).
If one wants to comply to central authority (that is, law and state), then crypto currencies are a waste of effort, because all the hassle of trying to establish trustless consensus (proof of work, distributedness, no single point of failure, openness, ....) is not needed, as a central authority can take on all these functions without the slightest problem (and actually has already such a system in place).
And if one wants a trustless distributed system, then this will of course be incompatible with whatever legislation that a central authority will impose. Every centralized entity working in such a system will be a point of failure. We see this with centralized exchanges in China, and you will see that with centralized tumblers, masternodes, whatever, in crypto land. In other words, you can only hope to use a trustless decentralized system away and hidden from law and state ; or it will just become a centralized tool that will comply and ressemble the centralized systems that states have already put in place, but with a handicap: all the (needless) hassle of wanting to be trustless and hence distributed in that case.
As such, the only crypto currencies that make any sense in the long term, are anonymous, dark-market style, totally distributed systems, that do not betray (or try not to betray) their (evidently illegal) users and supporters. All others will have centralized points of failure, and/or become "compliant", and hence useless and wasteful as compared to the centralized systems that are already put in place by authorities.
Bitcoin and a few other transparent ledgers are probably going the "compliant" way, to be just as integrated, traced, manipulated and "big banked" as the classical systems ; for the others, who would want to keep the distributed trustlessness alive, only the underground is possible. In the mean time, you can Ponzi a lot, and if you do it right, you can get out a lot of wealth from the belief of others.