...A FF sensor and great white lens will deliver better IQ than an APS-C sensor and a shorter lens. Pairing a great white lens with an APS-C sensor might make sense with small and distant subjects, but in most cases atmospheric effects and diffraction diminish the returns substantially.
Maybe.
My experience with the 1DxIII, R5 and R3 has shown me that in real world use, old assumptions about sensors are just that:
"old assumptions."
Old assumption: a high resolution sensor is noisier than a lower resolution sensor at higher ISOs. Real world experience: The high resolution R5 sensor and the sensors in the 1Dx III and R3 show virtually identical levels of noise at higher ISOs. There may be a difference, but when translated to a final product, I have found that the differences are not that significant. It follows that the noise factor in an APS-C sensor, while certainly there, is likely to be much less in real world use than it once was.
So yes, in theory, a FF sensor and great white lens will deliver better IQ than an APS-C sensor and a shorter lens. But in practice I think most people will find that the difference in IQ is less than one might expect. I suspect that the greater difference will lie in the fact that a big white has a wider aperture, which allows for greater separation of subject from background, along with the inherent sharpness of a big white prime that costs upwards of $10,000.
A great white lens with an APS-C sensor does not necessarily mean distant subjects. Most songbirds are not so far away to cause problems with atmospheric effects, rather they are simply small.
Finally, let's be realistic. Not everyone can afford a big white and even those who can afford one may not always finds it practical or desirable to carry one around. Ultimately, it always comes down to the tradeoffs. Canon apparently believes that enough people will find the trade-offs inherent in an R7 are worth the advantages.
I have no doubt that the R7 will be a great camera and that many photographers will produce great photos that will be indistinguishable from photos shot with other combinations.