Your CPU will throttle to protect itself. In fact some devices are designed with the expectation that they will throttle. A famous example is the Macbook Pro with an i9 from a few years back. That notebook basically couldn't make use of the full power of the CPU because the cooling couldn't keep up.
Now, where there could be a concern is if ASUS marketed your machine as hitting certain performance targets based on the cooling achieved at 7000RPM. If it can no longer reach advertised performance that would be a basis for a complaint.
I suppose it's a matter of preference but I would rather let a machine throttle than have a fan at 7k RPM. That just sounds unbearable to me. If performance has tanked due to reduced cooling then that is rough. I'd hate to have to choose banshee mode to get decent performance.
I suspect a fan at 7k will fail before a CPU at 95C. So if you're worried about the life of the machine I think you're looking at the wrong component. But, on the other hand it seems like the fan's manufacturer seemed to think it would be fine at 7k so I guess it should be an option for owners that want it.
Your only option at this point is to find an older bios that doesn't have this issue but doesn't produce other breaking issues either and simply downgrade. It is what a lot of us are having to do, even on newer models than you that are still within the product support range. It's a shame that we have to resort to this and I genuinely am starting to feel like the ASUS technical and support team quality has deteriorated.
A lot of the ASUS laptops I have purchased seem to come with an annoying fan resonance that is outside the expected range of noise as well as the well known FTPM issue now effecting AMD systems. And if you send your product in, it has a chance of coming back in worse shape or they will simply deny that there is any problem at all.
I've been in contact with ASUS too and I am currently building a report that documents the problems as well as the lack of any real support or ability to take responsibility for issues.