What would you do in this situation?

Keep him in the 7th grade I'd say. With his friends and around people his age. He will learn the more challenging things to learn in school in time. His intelligence isn't going anywhere. I agree with some others that it's more important that he learns to socialize at this point and be around kids his age. He already has the smarts. You could always challenge him at home with more advanced math and science and keep him in music. That's what I would do if it was my kid at least.