That's pretty bogus. I was hoping for a fresh install. So that's meaning you get one "clean install" per copy of Windows 7? What happens when you try to install a clean copy on a new hard drive?
You can do a clean install of the Windows 7 with an Upgrade disk. I did it last week on friend's computer. His old computer was in slow death... literally. Hard drive was over 12 years old and clicking like crazy.
Built him a new system and used the Windows 7 Upgrade disk, installation went like a charm and no problems whatsoever with activation. It installed as if it was a full retail disk for some reason!?
IF you do have problems; check out this tutorial here:
https://www.w7forums.com/clean-install-windows-7-upgrade-media-t2225.html
IT works, if not on method one, it has always worked on method two.
You can do as many clean installs as you want, just as long as it's on one computer only at a time. There is no "install limit" to Windows 7, just one key per one machine.
IF you don't want to go through the hassle of a new install on the new hard drive then install Acronis True Image and use the "Copy Drive" feature to transfer to the new hard drive.
It'll work, believe me! Just remember... one install - one key.