I'm not sure. S3 ViRGE 325 was a Direct3D 3 era card, but got Direct3D 5 compatible drivers at the end.
Windows 98SE shipped with DirectX 6.1 and would test hardware acceleration with those older Direct3D drivers being used.
DirectX 7 or Direct3D marks a category on its own, though.
Later DirectX Diagnose programs divide Direct3D in Direct3D 7, Direct3D 8.x and DirectX 9.
On Windows XP, I remember, the S3 ViRGE 325 had its hardware acceleration enabled in DXDiag.
Edit: Or in other words, I don't know.
Direct3D 7 API normally is being used for anything Direct3D 7 and earlier.
So it's the legacy API, essentially. In your case it's more modern than the S3 ViRGE drivers and definitely not acting like a "legacy" API.
To DirectX 7, Direct3D 7 is current API - not a compatibility thing.
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