As long as it has non-corrosive primers, shooting steel cased ammo through your XS7 shouldn't be a problem.
The drawbacks of steel cased ammo are:
- it's loaded to lower pressure then brass cased ammo due to the nature of the steel case.
- it is usually very old military surplus ammo.
- often, it isn't loaded with accuracy as a priority.
- the powder tends to leave more fouling then many commercial brands.
- usually non expanding full metal jacketed rounds which aren't good for hunting.
If you are looking for ammo to use for break in or plinking then the steel cased stuff is cheap, useful, and fun!