photo background removal on iPad 7th gen iOS 16

Photo background removal within iOS/iPadOS16 is available to devices with an A12 or later CPU:

• iPad8 or later
• iPad Air3 or later
• iPad mini5 or later
• iPad Pro 11” (all)
• iPad Pro 12.9” third generation or later

As such, this feature is not supported by your ipad7.

I do not think this feature is available to iPads, but if it is, it might be ONLY available to iPad models that use the Apple M1 chip or greater, such as the iPad Air 4th and 5th gen and iPad Pro models from 2020-2022.

Base model iPads lack the CPU hardware power.