"Major design challenges" ... LOL. A mirrorfree "EOS M7" far superior to 7D II would not be very difficult.
Start from EOS M5
* put new top-notch 28 MP DP-AF sensor in [100 $]
* put better DIGIC and 64 GB fast buffer memory in [100 $]
* put top-notch AF system in for full Servo tracking @11 fps, also in focus priority [50 $]
* put lag-free "4k retina" EVF in [50 $]
* make grip a little bit chunkier [1 $]
* stick a regular LP-E6N battery into it [0 extra cost]
* put 2 UHS-III SD card slots in [5 $]
* add a few O-rings, gaskets and foam behind doors, wheels and buttons for decent weathersealing [1 $]
done.
Vertical grip? Canon just needs to follow innovative Fuji's approach. No significant R&D expense involved. Much smarter design. Rather than a stupid connector "sticking into camera battery slot" a 2 battery grip working in combo with battery in camera = 3 batteries total. Plus even chunkier grip for those who like it big. No big deal really. And still smaller than any EOS R mount camera.
https://www.dpreview.com/reviews/fujifilm-x-t3/3
... and where is "innovative Canon"?