If there is a ref at the table, loss of game. If not, the player that made the 7 would make the call, going by strict rules, it's a loss. But often in local tournaments I have seen thigs like this forgiven. Player breaks, mis-cues and misses the rack, technically it's the other players choice if they want to break or let the other guy break again, almost always the one that miscued just grabs the ball and tries again with no-one saying anything. That's against the rules but allowed to happen most of the time.
If I was playing, and I knew that the player was new to the turnament, I would just replay the rack.
Were the rules announced before the start? In many local tournament people tend to assume everyone knows all the rules that are not standard. The only rule set I'd assume would be used are the WPA rules for any game, but I always ask, and make it a point to inform any new players I play that they know the extra rules also. In the local tournament I play, the 9 ball does not count on the break and needs to be called, in 8 ball the 8 ball also does not count on the break. I let anyone I have not seen before know those rules before we start as they are not always announced. And if they are announced, unless you actually know how to play, those rules may just go right over your head as meaning nothing. Like if a surgeon told me that some procedure needed to be done with a bluggatroon held with a froomister tool. I would not know what those would be even if I was stabbed with them so they saying that to me would be useless without more info.