I need to know a little bit more about your 2nd dropdown. I think it might be a combobox. You can verify this by selected the dropdown and looking at the top of the data pane.

If it is a combobox, you will need to put the formula in the 'DefaultSelectedItems' property and not the Default property.
Try changing it like this:
If(
DataCardValue7.Selected.Value="A",
["Approved"],
["Rejected"]
)
You will also want to provide some logic as to when this applies. This ensures that if the item is in view mode or being edited, it keeps the original value until it's changed. Something like this:
Switch(
DataCard7.Selected.Value,
"A", If(FormX.Mode <> FormMode.View, ["Approved"], ["Rejected"],
Parent.Default
)