I see the AI answer has given some suggestions, but I must say, the symptoms feel more like hardware/firmware-level issue. Since the normal reset/reinstall is already failing because the Surface restarts during the process, the next useful step is to perform the recovery from outside your existing Windows installation:
- On another working Windows PC > Open Microsoft's Surface Recovery Image Download page.
- Sign in with your Microsoft account > Select/register your Surface using its serial number.
- Download the most recent recovery image offered for your Surface Laptop 7.
- Connect a blank USB drive > create a recovery drive following instruction.
- Disconnect any other devices from the Surface > completely shut it down.
- Connect the recovery USB > press and hold Volume Down > press the Power button.
- Keep holding through the logo, only release the button when the spinning dots appear.
- If the Surface remains running > click Troubleshoot > Recover from a drive > proceed with recovery.
However, if the Surface again shows the error/restarts while booted from the recovery USB, or repeatedly restarts before recovery can finish, don't keep repeating Windows resets. At that point, I would proceed with Surface service rather than another Windows reinstall. Since this is out of warranty, you can contact the Support team first:
- Sign in with your account at Contact Us - Microsoft Support
- Enter / choose an issue > click Get Help to make a request
- Scroll down > Contact Support (if the option is available):
- Or click Ask our Support Assistant instead and follow guidance
- If the issue persists, specifically state in the chat box that you need direct help.
- The Contact Support button should appear now > click it > select the chat in browser option.
Note: The support contact team only works at certain times, so if the last window shows that it's unavailable, try opening it again the next day. If you prefer phone support, you can leave a phone number. This way, they can call you and help you.
When contacting Microsoft, make sure you specifically tell them that this Surface was itself supplied as your previous warranty replacement, and provide the old service/replacement order number if you still have it. They can then check what service options are available for this particular device now that its warranty status is expired.