How to use pytest to check that Error is NOT raised

A test will fail if it raises any kind of unexpected Exception. You can just invoke foo(7) and you will have tested that no MyError is raised. So, following will suffice:

def test_foo3():
    foo(7)

If you want to be explicit and write an assert statement for this, you can do:

def test_foo3():
    try:
        foo(7)
    except MyError:
        pytest.fail("Unexpected MyError ..")