Hello Robin,.
The ML7 headstock has the same sort of adjustment for end float as had been used on the ML4
The collar with the grubscrew inboard of the end gear on the spindle is used for setting, it is fitted on a threaded portion of the spindle.
Remove the grub screw to check if there is a copper or brass pad below it to prevent damage to the threaded section and screw it up to remove the surplus float. Refit and nip up the grub screw and check that your chosen setting has been held.
There should be slight resistance to turning the spindle, without any belt drag, when gripping the chuck nose thread by hand. Best done on a cold machine.
I hope that helps
Brian