Did they circle the city on [seven consecutive days, i.e. including] Shabbos?
Rashi: Yes. The seventh day was Shabbos. 1
Why does it say "ka'Mishpat ha'Zeh Sheva Pe'amim"?
Malbim: They did "ka'Mishpat ha'Zeh" (circled the city once, just like on the first six days), and this made "Sheva Pe'amim."
Why does the verse repeat "Sheva Pe'amim"?
Malbim: Hashem decreed that all the actions pertain to seven, which is Kodesh regarding days, months (refer to 6:3:3:1*), years, Shemitos and everything 1 , as is known. There were seven Kohanim, seven Shofaros, seven days, they circled seven times. The first circling joined with those of the previous days to make seven, and with the others of this day to make seven.
E.g. there are seven Sefiros (each Kena'ani nation corresponds to a blemish in one of them), seven levels of Shamayim, seven Ushpizin, every Musaf (except for Shabbos) has seven lambs, seven sprinklings of blood of inner Chata'os on the Paroches, and for Parah Adumah and Asham Metzora, one who marries a woman is forbidden to seven relatives