The Seven Malfested Swords are a group of particularly strong Malfested that have retained their human consciousness and serve as Nightmare's most powerful soldiers in his forces. Each one is bonded to an Iska and gains power from their bond. We know four of the seven, and can guess the fifth. Two of them are complete unknowns
The first member is Johan Durer, the Greatblade. He's the antagonist of Hilde's story mode and the closest thing to a leader amongst the seven, hence his title of Greatblade. Johan's bonded to Iska Zwei but doesn't draw on his power often, as Zwei is averse to combat, meaning that Johan primarily operates alone. Johan has a huuuge bio in-game that I won't go into here, but the point of the matter is that he's considered among the most dangerous of the seven, due to his cunning and severe cruelty. He primarily operates within the Holy Roman Empire, and frequently reports to his "King", Nightmare, on the progress of their army's growth and his experiments into cultivating and harvesting powerful souls. Johan's actually existed as a character since the original SoulCalibur way back when, but his first in-game appearance was in SoulCalibur IV, where he utilizes Nightmare's fighting style. This is the most he's been active in the series ever, and I frankly wouldnt be surprised to see him become playable down the line with a unique longsword style.
The next member is Curtis, the Inquisitor. Those of you who played Groh's story mode will recognize him as a member of the Aval Organization and Groh's best friend who met his end after Azwel's betrayal resulted in his malfestation. After Groh slays Curtis, he was thought to be truly dead, but somehow (possibly due to Iska Vier's influence), he was revived as one of the Seven Malfested Swords. Curtis acts as the personal security of Nightmare's Castle that I don't feel like spelling, slaying infiltrators and those trying to escape. Curtis is likely to be a rival to Groh in a future story, so if he becomes playable on his own, i'd expect something like a script-flipping on Groh's fighting style, with his twinblade split to begin with and joining as part of his stance. Curtis is also noted to wield magic to some degree but to what extent is unknown.
The next member is Azola, the Corrupter. Azola is a hell of a deepcut and I'm kind of amazed that they referenced/incorporated her. Azola started off a costume for Sophitia that was intended to have a unique name. The costume concept was used, but Azola herself was not. She reappeared as a minor antagonist in SoulCalibur IV, like Johan. Azola is referenced in a library document, with her preferred tactic being to malfest as many people as she can in a given location. I picture her, if she becomes playable, to have some gimmick in her style to reference this. Maybe damage over time, maybe some form of discombobulation. I dunno. I'm just excited that someone as minor as Azola might actually become relevant
The last member is Won Gabok, the Cursed Flames. His stuff is all covered in Hwang's story mode. BUT, i do like what Gabok brings to the table. Namely, he provides an ongoing enemy for the Korean characters, which is something they lost in later entries as the Toyotomi wars ended and the Korean cast was written out of SoulCalibur V (and also time and budget constraints but shut up). I also wanna give it up to Joe Zieja's great voicework, just selling Gabok as this complete piece of shit hammy loser and his fun back and forth shittalk with Acht. I hope he becomes playable for more of that alone.
A likely member of the Seven is Solnhofen, who is similarly a minor antagonist in SoulCalibur. Solnhofen is a member of the Bird of Passage, just like Tira. He used Raphael's style in 4, so if they wanna make him a vampire or something while Raphael is busy not being a vampire, that'd be neat or something. I unno. I'm just putting him here to note the trend with Johan and Azola.
Who aren't a part of this group?
Probably not Astaroth or Aeon. Astaroth isn't a malfested human like the rest and Aeon fucks off after Soul Edge shatters because he regains his human consciousness and journeys to regain his body.
Probably Not Tira. She's not with Nightmare yet nor is she Malfested at this point.
Who could be a member?
The Seven Malfested Swords seem to come in two flavors
New characters and "Huh???" older characters
For new characters, we have Curtis and Gabok, they're connected to Groh and the Korean cast, respectively, so other members may be completely original but for the purposes of giving other characters more relevance and personal stakes in the story, which is something that previous entries struggled with.
In terms of older characters, I think there's a number they could pull from, just going on the precedent set forward by bringing Johan and Azola back into some kind of relevance.
One example that came time mind was the Berserker from II, buuuuut i think the idea of this character may have actually be repurposed into the Aval Organization's Archibald, who is noted to be an axe-user clad head to toe in armor.
The original characters from III's Chronicles of the Sword mode come to mind, it had plenty that could be yoinked and reinvented as members of Nightmare's forces, like Strife, Chester, or whoever.
For "characters that fuckin' died while malfested", there's probably some more options here, but the one that springs to mind is Xianglian, who gave the Dvapara-Yuga to Kilik once the Ling Sheng Su Temple's monks became malfested. It could be interesting, buuuut i think she's probably staying dead lol