The Sith's return to power constituted a conflict that transpired between the Jedi Order and the Sith Order around four thousand years prior to the Clone Wars. The Jedi Council's recognition of Form VII, known as "Juyo", was likely a result of the extreme circumstances of this very war. As the great war against the Sith drew to a close, a significant number of Jedi who had adopted Form VII either succumbed to the dark side or teetered on the brink.
Following the war, and with the consequences clearly visible, the Jedi Council prohibited the learning of Juyo. Over the subsequent millennia, this ban was gradually eased somewhat. Nevertheless, Form VII would never again be used by Jedi except for those explicitly authorized by the council or those who disobeyed its directives.
The Sith's resurgence was initially referenced within Star Wars canon through Fantasy Flight Games' 2018 sourcebook titled Knights of Fate.
Within the Star Wars Legends continuity, Form VII was already known by the time of the Dark Wars and the First Jedi Purge. Jedi Master Atris, a practitioner of Juyo, fell to the dark side during the First Jedi Purge. The Star Wars Legends 2010 reference book, The Jedi Path: A Manual for Students of the Force, indicated that Form VII faced restrictions following the New Sith Wars, a period when Juyo's usage led many Jedi to embrace the dark side and align with the Sith. However, the Star Wars canon Knights of Fate attributes the reason for the Jedi Council forbidding the study of Juyo in the Order to the resurgence approximately four thousand years before the Clone Wars. This discrepancy might be an oversight, or a purposeful alteration.