I too have a 7 year old and a 3 year old. If I let it go on, then my daughter and friend would shut the door and be by themselves. I totally get that they want to play by themselves, but in the arena of general politeness...I don't like it and don't allow it. I always have to remind the older one before the friend gets there that the younger one wants to play too and make sure she includes her. And then again when the friend arrives I remind everyone the rules...nobody gets excluded and doors stay open.
When the younger one isn't shut out, I find that she'll play a little with them, but then decides to go do her own thing sometimes too. Also the older ones figure out something to play with all three. Last week they were food servers and needed somebody to serve to...enter willing 3 year old and the play was all very nice!
I also make an effort to find something for the little one to do so the older girls really can get a few minutes to play w/out the drama of physically removing or excluding anyone. I'll include the 3 year old in some baking or letting her watch a little Super Why or do art or something.
I feel your pain. In my opinion, I don't like anyone learning to exclude...in life it's just not a nice to thing to do and it doesn't feel very good for the one being excluded. But it's totally normal for this to be happening. Trust me...I'm one of 3 and it was no different when I was growing up!
Good luck!