Well it already can't work with *all* DPP equipment since it only has two outputs. You couldn't hook it up to a DPP switch. And given the documentation we've already seen, it's fairly obvious that the way this new LNB works is by cramming all of the circuitry of a Duo Node into the LNB. Now, it is possible for it to default to "DPP mode" until it sees some signal from a Hopper, but that seems unlikely given the fact that they still need DPP out there for all of the other reasons I said.
It's possible for them to refurbish 722s and keep reusing them, and of course they'll keep selling them and leasing them as long as they have stock. It's not like they're going to throw them away. Receivers have much more turnover than LNBs, though, and you don't send LNBs back when you cancel service or when you upgrade. There won't be a huge fleet of LNBs coming back to Dish over time. They'll need new ones as time goes on and new installs are done.
It doesn't. You'll need to use a legacy DPP LNB with the DPP switch.