There are two variations, with or without limiter. (Check the manual for turning on or off it). In either case, when you reach the "limit" the 7xx starts to sound, lets phrase it like this, less good.
The limiter is a life-saver and not any issue at all on very rarely occuring short burst, but if you run levels so high that the limiter is engaged more than very infrequently I start hearing artifacts. The limiter kicks in at less the -6dB, so one red light should really be the maximum to aim for. This is nothing really specific to the 7xx machines, my ears does not like limiters. Probably one reason I hate listening to modern pop on the radio, limited out of all proportion in order to "win" the loudness war.
Running smack into 0dB on the 7xx without limiter will create signals that cannot be converted to digital. The 7xx behaves decently as things go, but not really what you want to have.
In a pop concert setting, recording PA, it might not be an issue either. The dynamic difference, weak to strong, is not really very high and there are typically limiting factors in how high sound levels can get from the speakers. And pop engineers tend to work smack against that level, so not much surprises to be expected. In my recordings, doing acoustice music without PA-s, the situation is different. Dynamics may differ from a single instrument playing barely audible to quite loud when 110 musicians all are doing their things. (No joke, I recorded Beethovens 9:th symphony this year, 110 musicians + 20 choir + organ) And even if you believe you have it all covered, often there is one or to places where the percussionist does their best to really clear the ears of the audience peaking well above normal levels on the recording stuff.
One issue is that some of the tapers started back in 16bit days, when you had to maximise levels in order to get a useable recording. The habit than was to run smack into 0dB as the preamps were designed to handle that. One advantage was that the recordings were loud without any postprocessing. The V3 might be desiged to nicely handling "overs", and perhaps even adding some extra euphonics at those levels. Nothing wrong with that, a pleasing end result is what counts, and taste is individual.
My message though is that when changing euipment you have to investigate how it behaves and how to use its strenghts and avoid its weaknesses.
A small note, one red light for peaks is -12 dB on the 7xx, well within the good zone according to my ears.
Gunnar