Back in “Should you use the lead entity?”, Joel Lindstrom provided an excellent summary of when using Leads is a good idea and what their limitations are. I am not a huge fan of Leads for the excellent reasons he stated in that Tip. The last straw for me was in Dynamics CRM 2013 when they ‘improved’ the Lead conversion process and forced you to create an Opportunity. However, as Joel states, there are times when using a Lead makes sense, it is just not very often.
The Sales Navigator is a powerful tool to the point that Microsoft use it in their promotional videos to sell Dynamics 365. Amongst other things, it allows you to search your extended LinkedIn network, using all manner of criteria, to find potential customers. There is integration with Dynamics 365 and this is where Leads come in. The integration between the products uses Accounts, Contacts, and Leads but NOT Opportunities.
If you are building a new Dynamics 365 system which will work with Sales Navigator or adding Sales Navigator to your existing sales processes, you will likely need to embrace Leads as part of your sale qualification process in Dynamics 365.