Digital zoom is definitely an underrated feature of these higher resolution cameras.
On my GH5 I used the 2x punch-in on my 17.5mm F0.95 to get 35mm and 70mm FOVs, and on my GX85 I used it with the 14mm F2.5 pancake lens to get 31mm and 62mm FOVs in a pocketable form-factor.
The crop function on the GH7 is different and a bit more restrictive. You get continuous zooming, but only to the point where the resolution you've chosen is at/near 1:1 crop into the sensor. So, if you've got the 14mm lens on there and you're shooting in C4K, you enable the feature and it pops up a box on the screen saying "14mm" and you can zoom in more and more by pushing or holding a button and it goes from 14 - 15 -16 - 17mm, but it won't let you go further. If you're in 1080p mode then it goes from 14mm to 38mm.
Conveniently, if you disable the mode then it goes back to 14mm but if you re-enable it then it goes back to whatever zoom you were at previously, so it's easy to set a zoom level you like and then jump in and out of that FOV.
My testing didn't indicate any IQ issues with it, in 24p mode anyway, so I think it's probably downscaling from a full sensor read-out.
Not only is it really good for getting more FOVs from primes, but it's also great in extending the long end of your zooms too.