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This is about the guaranteed legendary and reapers fear we get for completing act 1-4 and act 5. Will it be based on the lowest difficulty used during the campaign or the difficulty at completing the last quest?

I wanna farm for reapers wraps, so the question is should I do the campaign on normal and kill Diablo and Matheal on torment 2? Or play the entire campaign at torment 2?

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The loot quality is determined by your character's level, not the difficulty so you will get the same quality items in Normal or Torment 2. What changes is the drop rate of crafting materials which is really low in normal (15%) and up to 77% in Torment 6 so higher the difficulty, better the chance of finding the material. As for your concern regarding the whole campaign, it doesnt matter in which difficulty you played, only the difficulty at the time you kill Malthael matters.

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I should be able to defeat him at t3, which is 44% –  MrFox May 19 at 9:49
    
I believe this is incorrect; there's a blue post that says difficulty does affect loot quality. They didn't really expand on it, but it does seem pretty straightforward; higher difficulty = better loot. –  Frank May 19 at 13:16
    
@Frank An affixe value on an item is not affected by the difficulty : you can have a rare ring with +350 dexterity in normal or T6. What difficulty changes is the likelihood of having more affixes on rare/blue items. Rare can roll between 4 and 6 affixes. Playing in higher difficulty increase the chance of having 6 affixes instead of 4. It does not impact legendary items however since the amount of affixes is fixed for those. –  WizLiz May 19 at 13:22
    
Do you have any proof of that? Until you do, I'm gonna take a blue's word over yours. –  Frank May 19 at 13:24
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You should put the links to the posts in your answer, bit easier to find than in comments. –  Jonathan Drapeau May 23 at 13:16

The loot is only determined by the difficulty you are currently using. So if you only want the Reapers Wraps you should kill Malthael on highest possible difficulty for you.

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Why? Would Master-level Reaper's Wraps be better than Normal? –  Orc JMR May 19 at 15:17

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