It stopped working when it accidentally fell from my head a few years ago and I ended up getting another one. I was confused and frustrated why that slimline coil didn’t work anymore even though my processor fell from my head a few times before and came out fine and still chugging. There isn’t any visible damage on that particular coil anyways. I even cleaned it today and it still doesn’t work despite still in a mint condition. Any idea why is that? 
The N7 was a very poor fit on my ear. I had to use a retention snug fit. I currently use a hug fit on my N8 as it’s not a perfect fit. It’s a lot better than the N7 though. Do you need a stronger magnet to help hold it on your head better? Or buy a hug/snug fit to prevent the processor falling off.
With the N7 falling off your ear, something on the inside of the casing could have broken. I have no idea though. As the old coil doesn’t work did you try a new coil?