Some of the non sealed beam headlights have a small bulb located towards the bottom of the reflector. This is a parking light and the small gray wire with the connector on it plugs into it to provide power.
Without knowing what 7 inch headlight your buying, it might have this extra parking light bulb so that is where the wire would connect. If it doesn't have the parking light, the connector can be left to dangle.
I used that connector to hook up my digital LED volt meter I got from NFG.
I also disconnected the short jumper wire with the red connectors so my headlight switch works like it is supposed to.
With the volt meter connected to that gray wire, if I don't have my lights turned on the volt meter stays unlit. If it is lit, I know my lights are turned on.