Don't worry! The exit pupil just means that the diameter of the parallel beam coming out of EP is 7mm while the input beam is xmm (the primary of the scope) and thus, if the beam is larger than the eye, the eye won't see all of the input light as a 3.5mm pupil of the eye will mean that the light actually used from the input beam with be 1/2 (3.5mm/7mm) of the input light that comes into the input. In other words, if the exit pupil is larger than the eye, the eye masks off the excess and uses what goes into the eye.
Please note that this isn't discussing the FOV of the EP as this is the angular viewing of the eye while what we are discussing the wavefront that actually gets into the eye from one single point source.