For Microgaming, the upcard is the FIRST card recorded - because it takes the hole card after the player hand has been completed. As opposed to RTG, where the upcard is the SECOND recorded in the play logs. All admittedly very confusing. So the upcard against the seven pair was a three in this instance, making the split theoretically correct.
LOL, the old "double if you want, but I'm making 21 whatever you do" Microgaming ploy. I've seen plenty of that lately. In fact, Microgaming single deck (which isn't what this player was playing) is currently playing much as it was pre-2003, before the shat themselves over the OCA and pulled the fix out. See my three consecutive 11 doubles in the "Nightmare" thread - all of which were sucked out to a dealer 21. I've seen plenty more of that subsequently.