Windows 7, 8 Digital Licence
Windows & Devices
The method of activating Windows 10 with a Win7/Win8 key still works, however, as noted on the websites for the Media Creation Toolkit you need to have an eligible license to install Windows 10. https://www.microsoft.com/en-us/software-download/windows10 (also works with the most recent versions of WIndows 10)
So while it might work technically, a customer that only has Windows 7 does not have an eligible license. This is similar to other scenarios where something might work technically even though you do not have licenses (e.g. Windows Server access & CALs, RDS User CAL tracking etc.)
The installation method with the media creation toolkit is the only bare-metal installation method for customers that have licensed Windows 10 (Business/E3/E5) via the CSP program. Those customers have an upgrade benefit with their CSP license that allows to upgrade from Win7 and Win8, so they are eligible - as an example.