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If this law comes into effect, consumers will pay the increased cost of delivery of 7 years of software updates when they purchase new phones.

Smartphone makers don't sell new phones with a higher price tag and the guarantee of 7 years of software updates, likely because consumers would prefer a lower price and no guarantee.

Thus, the law would effectively force people to buy something that they don't want.

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You forgot to account for much higher resale values. After 2 years, you can resell your phone to someone who can still get 5 years out of it.

The fact that consumers don't want phones with 7 years of guaranteed updates (if they did, they would be willing to pay more for them, and smartphone makers would happily oblige) means that the impact on resale values would likely be small, or that consumers are unlikely to try to resell their phones.

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