Setting the APN settings manually didnt help.
I have a theory now about what has been going on. This is just a theory, but it's the best theory I have with the data at hand.
I suspect AT&T made a change sometime over the past few months to not activate SIMs on devices bought outside the US. The Pixel 7 pro was bought a year ago outside the US. It WAS working perfectly fine with the AT&T SIM card, though. I switched to a Pixel Fold purchased in the US over the summer. I moved the AT&T SIM into the Pixel fold and was using that happily until the internal screen cracked.
I think sometime during the time period I was using the Pixel fold, AT&T made this change.
After the screen crack, I switched back to the Pixel 7 Pro. When I put the SIM card in, of note - for a few seconds - I had internet connectivity by LTE and was actually able to load a web page in the browser, before the SMS came in that the device cant be activated, and the cellular signal indicator acquired an exclamation point ! to indicate an error.
Now what tripped me up in my analysis before was that I moved the SIM card back to the Pixel fold, running grapheneOS, and I again got the exclamation point and could not use cellular internet. I felt this confirmed that the issue was not limited to devices sold outside the US.
However now I think I experienced the ! during a period of time right after the SIM is detected, when AT&T is treating the SIM as though it were in whatever device it was in the last time AT&T did the IMEI check, which I theorize is not instantaneous, and so this was probably carrying over the rejection from the Pixel 7 pro.
I ejected the SIM and restored stock google OS, then put SIM back in, and it worked - I thought this confirmed that the issue was GrapheneOS.
However notably, after that, when I moved the SIM back into the Pixel 7 pro, I actually again got LTE with a normal 3 bars, and was able to load a web page in Vanadium. I thought I was good again, but a few seconds later the LTE symbol turned from bars into an exclamation point error message again and I could no longer get any cellular data.
So based on all these data it seems to me that when you immediately put the SIM in, it gets treated according to the last time AT&T checked the IMEI for that particular SIM, and the check is not instantaneous. So you get a brief window where you see what the conclusions were of the last device it was in.
The other conclusion is that AT&T may not be the way to go for me, as I travel overseas a lot and certainly may want to put the SIM into other phones or mifi devices or whatever, overseas. So that limitation isn't cool for me.
Thanks all for your help.
G