Bytes and Bits are not the same.
The launcher uses kilobytes to show current speed (KB/s).
A speedtest uses megabits, denoted as Mb/s (the lowercase “b”). Megabits are smaller than megabytes (MB/s, capital “B”).
Therefore, your connection has a max speed of 875 kilobytes (7 megabits).
The launcher seems to be using as much of the connection as it can (500 KB out of 875 KB) without disconnecting you from other services.