The 007 field encodes information about the physical characteristics of an item. It is intended for machine manipulation.
The information may represent the whole item, or parts of an item such as accompanying material. The 007 is mandatory for full-level records for microfilm and computer files. It is recommended for the other formats and levels of cataloging.
For the most part Houghton records will feature a 007 field in holdings records for "service copies"; an example of this would be a positive microfilm intended for patron use. That typical positive service copy would be coded:
$$a hd|afb---baca
Master negatives require slightly different coding:
$$a hd|bmb---baca
practice of inserting 007 in holdings record has changed from Aleph to Alma, in addition to Harvard Libraries moving away from the single record policy towards the multiple record policy. Consult the Metadata Standards Working Group's Best Practices on 33X and 007 in Alma Bibliographic and Holdings Records.
Basically, when the format described in the bibliographic record matches the format of the holdings record, do not copy 007 from bib to holdings. However, when the format represented by the holdings record is not reflected in the bibliographic record, create appropriate 007 field in the holdings record. See the MARC field documentation for precise codes.
The third byte contains either a blank or a fill characterN.B. There is no need to remove extraneous 33x or 007 fields from legacy holdings records, although it does no harm to do so.