Access list 7 prevents host 10.10.10.1 from being dynamically NATed. Denying host 10.10.10.1 is not required when doing static NAT. The IOS already has the host statically mapped.
With the current configuration, host 10.10.10.1 can only be NATED through port 25. All other ports will not be be NATed.
If you removed the access list 7, only the statically NATed host 10.10.10.1 will be able to route to the outside throught interface S0. Dynamic NATing of other hosts permitted by the access list will fail.
The access list is 7 needed for Dynamic NAT (or PAT), but not needed for static NAT.
The following links will be useful in understanding NAT:
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