Well, I do believe a tie is worth half a win so 7-7-2 (and 0-0-16 for that matter) is the same as 8-8 and therefore standard tie-breaker procedures would go into effect between the 7-7-2 team and the 8-8 team.
Based on winning percentage for teams with ties it would appear they treat it as if the tie game wasn’t even played. E.g., when Packers were 1-1-1 their winning percentage was .500 If they got credit for 1/2 a win it would’ve been higher.
What about 1-2-1 teams that were 0-16 and can’t win even with 42 points?