The destruction of capital does not affect k.dot or q.dot to shift since neither are dependent on "K". However K and Q move along these curves. K decreases and moves left from k.star to k1/2. This causes q to exceed 1 and therefore increase to point A. Since q is greater than 1, there is more investment in K since additional capital increases present value of firms profits. This continues in which the economy is on the saddle path and returns to equilibrium.