@boerma You are correct. While you can't mulligan 7 times, you can certainly mulligan 0 times. The exponent should be 7.
I think the rule has been misinterpreted and that you are supposed to put the cards back before determining whether or not you would mulligan, so you would exile the remaining cards in your hand. In practice, it wouldn't matter as you could just declare you are mulliganing and shortcut the selection. But it would effect Serum Powder and makes me wonder if that was the basis for the rule. And it has interesting applications for Powder in Dredge as it would allow you to save certain Dread Return targets from exile (albeit putting it on the bottom of the deck).
It is interesting how the impact of Serum Powder is much less with the new rule, even if you exile/draw 7 cards. Serum Powder might still be worth it as it increases the number of cards in you opening hands, but that is an interesting debate.