I am replacing an old 3 phase a/c unit with a new single phase a/c unit. Can I just use 2 of the three legs at existing unit disconnect to power the new single phase unit? Is that done by capping one wire or maybe removing one wire from breaker?
Yes, a new single phase system can replace an older 3 phase AC system! However there may be problems.
With 3 phase there will be a need to increase the wire size when going to single phase, so if changing to single phase your wiring may be 1.73× smaller than that required for single phase. Other than this it depends on the cost of the system and available voltage/ phases.
Last year I installed a shaved ice maker that required 208V. We only had 480V but the transformer was much cheaper than changing the compressor. It's still working to my knowledge and was making the ice at a rate that it was supposed to.
You can't assume the new unit will use the same size breaker or the same size wire - in fact I'd be surprised if it does. As mentioned in another answer, three phase carries 73% more power on the same wires, and three phase motors are generally more efficient than single phase. Unless your new unit is about half the tonnage / capacity of the old, I think you'll have an issue.
You could use the three pole breaker and disconnect the unused leg, but it's a little tidier to replace it with a two pole breaker, no wasted space in the panel and no temptation for someone else to add something that shouldn't be on that lug.
You may be able to use the disconnect - it's OK to have an unused pole - but again it would have to be rated for the new load, and the new load may be higher with a single phase unit.