Unlike earlier types of Automatic Level Control (ALC), the Sony TCD-D7 and its successor the D8 don't do a lot of boosting of low signals. The circuit is mostly designed to sense loud signals and lower the average recording level to protect against excessive peaks. With a weak signal like that coming from a Beyer M58 during a quiet interview, there won't be enough level to drive the DAT to full recording level.
The situation may be exaggerated if you have the Mike Sensitivity switch on the D7 set for Low sensitivity. For quiet interviews with a dynamic mike like the M58, make sure that switch is set to High sensitivity.
You can get better levels by switching to an electret condenser omni mike such as the
Audio-Technica ATM10a omni. This mike runs off a AA battery, and has a much stronger
output than a dynamic mike.