Apple Pencil 1st generation is not pairing/recognised by 7th generation iPad after installing iPadOS 13.7 update
The Apple Pencil won't show up in the list of Bluetooth devices unless it is paired with your iPad first. Physically connect your first generation Apple Pencil using Lightning.

Remove the cap and plug your Apple Pencil into the Lightning connector on your iPad. When you see the Pair button, tap it.

https://support.apple.com/kb/HT205236
If that still doesn't work, make sure you've tried all these steps.

If your Apple Pencil won't pair with your iPad

Restart your iPad, then try to pair again.
Go to Settings &gt; Bluetooth and make sure that Bluetooth is turned on.
On the same screen, look under My Devices for your Apple Pencil. If you see it, tap i. Then tap Forget this Device.
Connect your Apple Pencil into your iPad and tap the Pair button when it appears after a few seconds.
If you don't see the Pair button, wait for one minute while your Apple Pencil charges. Then try connecting your Apple Pencil again and wait until you see the Pair button.
If you still don’t see the Pair button, contact Apple Support.


https://support.apple.com/kb/HT205236#pair-help