I cloned this bug which was fixed in RHEL-8 back to RHEL-7 because recent automated testruns for the benefit of RHEL7.9z revealed that this issue also applies to subscription-manager on RHEL-7.9...

Here's a manual demonstration showing the failure...

[root@kvm-01-guest07 ~]# rpm -q subscription-manager
subscription-manager-1.24.51+27.g071c73f61-1.git.0.5e3b669.x86_64

[root@kvm-01-guest07 ~]# subscription-manager service-level --list --org=16769664 --username=stage_rhsmqe_testuser01 --password=REDACTED
+-------------------------------------------+
               Available Service Levels
+-------------------------------------------+
AMC-Enhanced
Premium
Self-Support
Standard
[root@kvm-01-guest07 ~]# 
[root@kvm-01-guest07 ~]# subscription-manager register --org=16769664 --username=stage_rhsmqe_testuser01 --servicelevel=Premium --auto-attach
Registering to: subscription.rhsm.stage.redhat.com:443/subscription
Password: 
The system has been registered with ID: dfed52b3-0777-4b1c-87bb-7eb6a0f772ad
The registered system name is: kvm-01-guest07.lab.eng.rdu2.redhat.com
Installed Product Current Status:
Product Name: Red Hat Enterprise Linux Server
Status:       Subscribed

[root@kvm-01-guest07 ~]# subscription-manager service-level --show
Service level preference not set
[root@kvm-01-guest07 ~]#


Actual Results:
  Service level preference not set

Expected Results:
  Current service level: Premium

Based on the discussion with Dev and QE teams, closing this bug as wont fix.