When you were caught drink driving, so when you were banned, the6 created a dummy record for you so that the ban could be put on it when (or if) you applied for a licence.
Presumably when you did apply for a licence, they did not match you up to the dummy licence and issued you with a clear one.
I don’t know why, 7 years later, they suddenly matched the two up.... perhaps you have just moved and told them, or had points to go on your record but in any case they have now matched you up with the ban.
Yes, they can require you to take the medical. As it stands, because you were convicted before 2013, you can submit an application and ask DVLA to allow you to drive pending the outcome of the medical. It is called an ‘authority to drive’. That will at least keep you on the road pending the outcome.
The medical costs in the region of £96. You could be cheeky and say “well it was DVLA that messed up, so the least you can do is give me the medical for free”. and see if they do that!