When I set the "Allow V7 dgn file open" option in File>Settings>User>Preferences>Operation it is not saved for the next time that I launch Microstation. How can I make this setting change permanent?
This "Allow V7 dgn file open" option under the User Preferences is something that can be defined in MicroStation CONNECT Edition or 2023, not v8i. It is always a good idea to mention the version that you're working in.
MicroStation Forum best practices
As Jon Summers mentioned the ability to edit V7 DGN files has now been deprecated so this option in the preferences would really only allow you to open these old format files.
What it appears you're having issues with is saving to the UPF or User Preference File. You should first try to perform a Save Settings to ensure you are saving any changes you've made. If the changes are not saving to your UPF then you should check that you have permissions to write to this file on your system and possibly have a look at some of the following suggestions.
Troubleshooting User Preferences Issues
RegardsAndrew BellTechnical SupportBentley Systems