So are you saying they never achieved the rank of 7th dan while they were with the first organization?
Absolutely not. They were awarded that rank. I'm saying that the only rank of importance to them now is founder of their organisation.
Put it this way, I've known people who hold ranks in seperate organisations, for example 2nd dan Aikikai, 4th dan yoshinkan. Nobody questions this, but it's supremely odd, because either the yoshinkan recognises the 2nd dan or it doesn't. If it does then they become nidan in yoshinkan and proceed from there. Unless of course they maintain their membership of the Aikikai then they would indeed have two ranks, so let's assume that rather than leave the Aikikai and join yoshinkan they leave and create their own organisation what is their rank then? It's nothing it's just founder of their own organisation, you can say former x dan of the Aikikai of course. But really so what?
Basically I see no reason why the gentlemen in question cannot issue someone with a 10th dan certificate in aikido. It would be legitimate for them to do so, so if anything I suppose my query has the effect of promoting them rather than stripping them of their rank. But to say they are 7th dan in the organisation they left means that the legitimacy of any rank they issue ultimately stems from a rank they no longer have any need to hold.
Does that make sense?