Can I work in Portugal if I hold a D7 visa?

The defining condition of the D7 is that you can support yourself from passive income, so that requirement must be satisfied independently of any job. Your eligibility is judged on the passive income, not on Portuguese employment.

That said, the D7 grants residence, and many holders do take on local work or self-employment after they arrive. The key is that you do not rely on that active income to meet the visa threshold. If your primary plan is to work remotely for a foreign employer, the D8 digital nomad visa may fit better.