Will dynamic destruction of QML element using destroy automatically clean up memory of its children also?
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It is supposed clean up children. Did you face any problem ?
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See http://qt-project.org/doc/qt-5.0/qtquick/qtquick-visualcanvas-topic.html#visual-parent for more information about this.
The short answer is that there are two different "parenting" concepts in QtQuick (object ownership parenting, and visual item parenting). In most cases, the visual item parent is also the object ownership parent, but there are cases where they can be different.
Cheers,
Chris.