I saw a situation in a WSOP video where the BB drew 1 on 3rd draw and the button had J7432. Is this a draw 1 to potentially make a stronger hand or a hand where you know where you are at better?

BB had 3! predraw and drew 1. Button raised after 1st draw and drew 1 to 7 perfect, and then bet after 2nd draw, so the pot was pretty big.

This was from the PPC and Negreanu stood pat, it was checked through after third draw, and his hand was good. You have a slightly better chance of having the better hand by patting. However, I think drawing is a little better. For example, there is the possibility of getting multiple bets in if you make a wheel. There was already a lot in the pot, which is a factor for patting.

It also matters how much they have behind in their stacks.

You are such a small favorite with a Jack that the implied odds are worth drawing when drawing smooth, for CeV.

You said it was a tournament; patting is the lower variance play, so with ICM it is much closer, and often right to pat.

One thing I don't see often when this exact spot is discussed (and it is in almost any primer on 2-7) is that when we draw, we sometimes have profitable bluffs as well; particularly when we pair our 7.

I'd guess some of this is player dependent as well. If Villain is a station, we get more value when we improve; if Villain is a nit, we can win the pot more often when we bluff.

Just like in NL Holdem, playing nodes where Villain is unbalanced is profitable; so if we DO know Villain will be unbalanced on the river, playing more volatile rivers in position makes sense. I guess that also applies to their tendencies if we pat; whether they over bluff or not matters as well.