TheFinn,
according to the PanAm B707 Operations Manual of 1976,  their autopilot had a NAV mode, too, exactly as the  CS707 has. By selecting this mode the autopilot is guided by the Doppler system.
The AA Manual tells that they had an AUX NAV mode for airplanes equipped with INS.
In my humble opinion it would not make sense to install a navigation system on an airplane and not provide a means to feed its data to the autopilot. If tracking a VOR radial by autopilot was possible at the time so should be using data from a navigation system.
Perhaps the 707s without NAV mode had to rely on radio and celestial navigation flying by VOR or HDG mode.

Best regards
Alex