10^-7 (loss/record) * 10^8 (record/year) yields 10 data losses per year. If you're even a medium sized business you need a much better than 10^-7 probability of losses.
And I wouldn't assume they meant that number to be per record in the first place.
The way I would go is by saying that you multiply the number of objects by AFR, and that’s close to the actual losses on most years. You can then exclude WW3 and the late holocene extinction event from your consideration. Or simple bankruptcy, for that matter. If your employer is gone, you don’t care about its data any more.
Durability is a knob. If you have enough data, or turn the knob too far in the direction of durability, you will simply bankrupt yourself or maybe drown your service in latency. It makes sense that you would have storage services that provide different levels of durability.