I kinda like the idea of them taking a year off to fix up the games, but I haven't heard anything to indicate that is happening.
I assume a will-be-sorta-ready FM8 is under development.
Well this Asian-looking Turn 10 guy (Chris something) mentioned in one of the fall 2018 Forza monthly streams that they now have the luxury of time, which they normally don't have. He also mentioned (and this was even earlier) that either nobody of the team was working on FM8, or that the entire team was still working on FM7, I forgot what it was.
But to me it is quite clear they will skip the 2019 holiday period with a new title. My guess is they wait 1 year to collide with the new XBox console lauch in 2020. And that right now they are shaping up FM7 to give it a lot of improvements in all sorts of areas, which will then become the base and foundation of FM8 as well. So technically, they are already working on FM8 as well, just using FM7 as a live service/testing platform.
I know it's all speculation but it makes sense in so many ways. And I agree with you it's a good thing, FM7 has gotten a lot of long overdue core fixes and updates to bring the franchise forward. Because let's face it, down to the core gameplay mechanics there weren't all that much differences between FM5, FM6 and the launch version of FM7. It's great they now improve all those areas like drifting, drag, time trials, collisions, race regulations, etc.
As a personal request and what always bothered me with FM 5/6/7, I would really like to see different tires introduced (hard, medium, soft, super soft, intermediate, wet) and the strategy that comes with it. Tracks would also need a full day/night cycle and weather options, not the fluff that the current "dynamic weather" is. And secondly I would love to see a "real" setting for all the assists, meaning if I drive an old 60s sportscar almost all assists would be off and gearing would be manual with clutch. If I hop into a modern LMP1 car then most of those assists would be switched on and gearing would be sequential.
What would also be really nice with this overdose of cars that we have (FM7 sits at 822 unique cars right now) is that they really start to give a part of the purchase options you see at a car dealer. For example if I buy a Mercedes A-class would I want to buy the standard version with the optional AMG trim line or not, night pack or not. Or would I want to buy the A45 AMG version. And of course with all the proper interior and exterior options that go with it. Yes it would increase the amount of work on cars drastically for Turn 10, but honestly, I rather have a game with 100 or 200 cars with all these options, than the 800+ we have now. Besides, for many cars this would not even be applicable. Like you don't have as much choices on race cars or classic cars like you have on new cars so it's not as if they would need to rework all those 822 cars.