Join Date: Jun 2007
Location: North Carolina
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From memory and I could be mistaken the 7 knot limit is for boats not capable of exceeding it not operating under it.
You are correct:
If your power-driven vessel is less than 23 feet/7 meters in length and its maximum speed cannot exceed 7 knots, then it may display an all-round white light, and if practicable, sidelights instead of the lights prescribed previously. (For International Rules only)
How you can be sure of that, I don't know.
Newport 17 - "Kohanna"
At sea Darwin's hypotheses is the final arbiter of right of way.