As the subject implies, it is impossible to extend the context class generated by SmcJava7Generator while it was possible to do so with the context class generated by SmcJavaGenerator. That has resulted in code breakage when attempting to switch between the two.
The specific use case where it is important to be able to extend the context class is where you want the context class to extend one or more interfaces. At the moment, there is simply no way to specify interfaces in the .sm file for the context file to implement (other than Serializable).
If you can subclass the context class, it's a simple matter to have your subclass claim to implement those interfaces. While it's possible to have a class which implements the target interface and has-A instance of the context class versus is-A context, you'd end up having to write pass-through calls for every method.
This bug will be corrected in SMC release 7.0.0.
Corrected in SMC release 7.0.0.