Well, not exactly same situation, but my older boy went from 5-7 last season because he wasn't quite at Level 8 (and there was no rush because he was too old for Level 8 nationals and uptrained all season anyway). He skipped L6 because it would have been too easy for him - which is very different from heading into optionals to get past a hard level. By the end of the season he DEFINITELY would have scored/placed better or the same as a L8 than a L7 due to a few compulsory items - on the other hand, by regionals he had mastered the basic L7 requirements - ALL of them - and tons of bonuses...and he's working all sorts of higher level stuff since then - double backs on floor, multiple release moves, and a ton of things with eastern european names I can't place but nod and say "sounds like fun"...Level 7 does have a lot of difficulty and to be honest, he scored better on pommel with very few bonuses than many of the kids with tons - due to serious attention to basics and form this year...HB too (although he finally got the routine down in totality for regionals).
The younger L7s (your boys age group and below) definitely needed really high scores to place at regionals...and great form. There were a few kids who skipped to L8 in our region at that age and did great, but most struggled, from what I can see.
Lastly, boys can't do L10 until 15 - so whether your son skips to L8 or not, he's got 4 seasons before he can do L10 (if my math is right). Based upon that it really depends upon what makes him feel successful/enjoy gym. He will have to repeat at least one level before L10...I wouldn't recommend it being L7, but if he skips it he has 2 to repeat - no biggy, really, but to him it may be. And what's his peer group doing? competing with friends is way more fun than without...
Is your kid the kind of gymnast/does he train in the type of gym that does WELL at Nationals? Cuz if not, why push to go there at such a young age and struggle? Does he care about his placements? Does he have a lot of the L7 basics with good form already? I don't think skipping to L8 at that age to AVOID doing difficult skills makes sense, as he is young and one would hope with good coaching and time will master those essential skills (there's not much I can think of in L7 besides the vault that doesn't directly build to higher skills he'll need....and the vault sort of does if the year is spent getting more powerful, moving up vault settings so he's ready for things like front-fronts...which is what DS did - lots of the younger boys seemed to struggle to get over low set vaults - even if they attempted the Yami-1/2, an ugly trainer vault in MY uneducated opinion).
I know there are gyms/areas that like to keep boys "in age" for Nationals - my assumption is that they have the coaching/facilities and training approach that makes this approach work. We don't, but we do have a gym that has produced multiple L10 boys even in our tiny state/tiny region. And not too many boys have quit in the last few years - which is more important to me in the long run. My younger boy was about middle of the road at state (placed in 2 events) as a 10 year old L6. But he had a bad state meet and didn't make regionals, and he's no where ready for L7 even (and not near puberty so I expect continued slow steady movement for a couple more years...if he works hard). Your 10 year old could be vastly different from mine (probably is) and might thrive at L8....I'm also speaking as a parent of a DD who was moved fast, and won lots as a young L7 but hit a wall with L8 - and I wish she'd taken her time a little more so the wall wouldn't have felt quite so hard!