Upon witnessing the martial arts of Yang Guo and Little Dragon girl, the Quanzhen sect realised that they were the nemesis of their own martial arts, and the surviving members of the 7 sons secluded themselves to research a counter. They found themselves unable to counter the Ancient Tomb techniques on a technical level, which is no shame for them, since their founder Wang Chongyang couldn't either (at least not without 9 yin). But then Qiu Chuji thought of an idea inspired by the Big Dipper formation - use raw power to compensate for their technical deficiency. So they developed their '7 stars gathering' technique, whereby they would focus their combined force at a single point. They would stand together tightly, shoulder-to-shoulder (not palm-to-back like in ROCH '83!), and throw their palms out.
It seems reasonable enough - use overwhelming force to blast straight through fancy technique. The 18 dragon subduing palms and YG's heavy iron sword used the same basic principle. The question is: how did they ever expect to hit their target?
Practictioners of Ancient Tomb martial arts had supreme lightness arts - they were fast and agile, and could even stand on top of your weapon! The Quanzhen priests, already at a major disadvantage in that department, would be further hobbled by the alignment requirements of the technique. While we know little about the specifics, it seems that the users must at least be close together and facing the same direction. However, the Ancient Tomb practitioners were experts at literally running circles around their opponents (as can be seen with YG and the two beggars), so if they did that, then the Quanzhen priests would be forced to turn with them to use the technique, which renders it useless since they would never be able to catch up all at once, if at all.
This seems to be borne out in practice when the remaining 5 sons first fought XLN - they were blasted apart before they could even begin to form up to use the technique. After they had a reprieve (due to the Mongolians joining in) and managed to pull off the technique, XLN easily dodged it - while fighting off the four Mongolians at the same time.
By contrast, the original Big Dipper formation would seem to be a more suitable match for Ancient Tomb fighters, since the users are spread out over a larger area (thereby slowing any circling) and defended by their neighbours, so they do not necessarily have to turn to face a circling attacker (since attacks will be blocked by neighbours) and a circler would be forced to go around them rather than the priests being forced to turn to face the circler (unless you know about the magical Northern star position like Guo Jing did, of course, but YG and XLN didn't). So why didn't they simply rely on the good ol' Big Dipper formation? I suppose a slight advantage over the Big Dipper formation is that the '7 stars gathering' can work with fewer than 7 members, but Quanzhen isn't exactly short on numbers.
And frankly, even if it did work as intended, '7 stars gathering' is a lame counter, since it relies (again) on mob tactics, pitting many against a few.