Say she is adjacent to character X, and character Y is two squares away, and would have LoF if her trait weren't activated. Object O is within 8 squares of X, Y, and Mystique, and they all have LoF to each other.


XM
..O..Y

Could Y use O in a TK attack against Mystique? TK specifies drawing LoF to the square, not the character.

If X had TK, could he attack with O?

It will work the same as Stealth would if the LoF crosses hindering.

In the case of TK, that means being seen.