You have some of the right numbers, but not quite right - the "factor of 7" is most likely referring to the exit pupil of 7mm.
Dividing the objective diameter by 7 gives you the magnification figure which achieves maximum possible brightness. E.g. it won't get any brighter (as perceived by the human eye) in lowering the magnification, but it will get darker if you increase the magnification. As you get older, the maximum size of your pupil reduces, so going to even lower magnifications doesn't help.
I am skeptical of the practicality of the formula because the maximum diameter of the human pupil varies hugely, and it doesn't take any consideration into the quality of the glass and coatings, which is the main contributing factor for light transmission (as I understand it).
Additionally, I don't think there's any practical use for such a formula - you zoom out to find the target, and zoom in to whatever you feel comfortable with to shoot. No maths needed. Plenty of targets have been hit at 16 power without 112mm objective lenses.
Useful links:
Telescope Equations: Minimum Magnification
Scope Formulas
I hadn't heard of "twilight factor" before but it appears to be another useless formula for trying to quantify and compare low light performance:
Optics Myth 9 - "Twilight factor" is key to performance in dim light
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