7DII with FF just won't happen. It would shut out too many potential upgrade customers with a current 7D and a bag full of EF-S glass.
I can count 4 EF-S lenses that would make people possibly hesitate at FF and nothing more:
EF-S 17-55mm f/2.8 IS USM
EF-S 15-85mm f/3.5-5.6 IS USM
EF-S 10-22mm f/3.5-4.5 USM
EF-S 60mm f/2.8 Macro USM
I own and use the last 3; they wouldn't stop me from getting a FF camera. The above lenses resale isn't all that bad, if you got them at a reasonably good price to start with.
Whatever the badge is, an entry level FF is DEFINITELY aimed at the 60D/7D owners and potential buyers.
We also don't know what's going to happen with the next gen of cameras. I've seen more than a few people on this forum mention that they do not like the articulating screen for robustness reasons, but it'd be hard for a company to explain why an articulating screen isn't added to any 'entry' level camera in almost any camera.
Personally, I like the rumor but won't get my hopes up . . . I wanted a 7D but could not force myself to pony up the cash and not get FF. I guess we'll see.