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I see no reason why it wouldn't use Hardware Acceleration unless you didn't set it up in program or maybe if graphic drivers aren't installed.
i used the AVI file format because when i use MP4 the game runs worst. But when i use windows 10, i use the MP4(Intel QuickSync) because it runs so smooth, and when i use AVI in windows 10 it runs worst.
Win10 has DirectX12 while Win7 can only use up to DirectX11 maybe difference in performance has something to do with that fact.
AVI by default doesn't have hardware acceleration so no wonder that option is greyout only MP4 has it.
If you really want to use QuickSync only way to do that is to make sure integrated graphics are enabled in BIOS and when windows is up right click on desktop and open Screen Resolution then click on "Detect" and click on "Another display not detected" then pick in display Intel then in multiple displays choose "Try to connect on VGA anyway" and then hit apply then on first primary screen on multiple displays hit "extend these displays".
Keep in mind that this extends display to what should be second monitor but regardless whatever you have second one or not it still will treat it that way and because of that there is a chance your mouse cursor goes beyond your primary monitor display so it might annoy you but unfortunely there is no other way to activate Intergrated graphics and use quicksync other then this solution I guess in Windows 10 this isn't needed but for Win 7 it sure is I do recall of some software that locks your mouse cursor on primary monitor while back that I used use but I don't recall how well it worked or how it was called.
This should activate QuickSync (I learned about this trick a while back from mirillis action forums) but if you rather use Nvidia instead of intel then don't use any of this.
I personelly don't use other then AVI and only use Hardware Acceleration while exporting video (and settings for Hardware Acceleration for exporting videos you should find separately in export settings) but that is just me.
PS I am on Windows 7 too and I already tested this so it should work about quicksync.
I already tried changing the file format from AVI to MP4 and the hardware acceleration still greyed out like in the screenshot.
But make sure its working before you go and start recording for real because if you didn't fully do what I instructed about in ealier post then you will find out even its not grey out it might not be working as intended.