Hi Soban,
Welcome to Microsoft Community.
I'm Hahn and I'm here to help you with your concern.
I'm sorry to hear that you're having trouble outputting in 4K resolution with your Surface Laptop 7. Have you tried adjusting the refresh rate settings on your Surface Laptop 7 to ensure that the external monitor is set to output at 4K resolution? Here's how:
- Right-click on the desktop and select "Display settings".
- Scroll down to the "Advance Display" section and click on "Choose a refresh rate".
- Select “60Hz” from the drop-down menu.
Because the maximum refresh rate of Surface Laptop 7 is 120Hz, and the external display has to output 5120*2880 resolution, which is only 60Hz. Troubleshoot connecting Surface to an external display - Microsoft Support
I hope this helps. If there is anything not clear, please do not hesitate to let me know.
Your Sincerely
Hahn. W - MSFT | Microsoft Community Support Specialist