Am I suggesting another Biblical error?

No.

What I am suggesting is that there is a context to verse 7 that limits the extent of the slaughter. For starters, the translation of the Hebrew word “zakar” may give the passage the wrong flavor. The Hebrew word “zakar” can mean “male” or “man”. So the passage might have read:

They did battle against Midian…and killed every man.

This doesn’t mean that they killed every Midianite male (as already noted, we know that they didn’t do that just from verse 17). What they did do was kill every man that fought against them in the battle.

With Midian thus unprotected, the Israelites then burned every city and encampment. They took prisoner every surviving person in every burnt city and camp. These people were later killed (except for the virgins).

But this does not mean that countless Midianites who fled before the battle was even joined might not have escaped. Nor does it mean that Midianites who were traveling at the time of the war were caught in the Israelites’ net. The remnant of the Midianites continued, and their descendants later got the upper hand against the Israelites as recounted in Judges.

Furthermore, the virgin slaves would not remain virgins. They would become the wives or concubines of Israelite men. Many Midianites had already intermarried with the Israelites (including Moses’ own wife). It is conceivable that some of these half-Midianites within the Israelite host would eventually defect and join the Midianite remnant.