huju,
Having been around Lubavichers on a number of continents for many many years, and knowing well their ins and outs, I can assure you that you have it wrong.
The younger generation has been inculcated with the belief that their rebbe has not died and that he is definitely Mashiach. There are differences in explaining what “has not died” exactly means, but the vast majority sing Yechi etc.
They’re not waiting to appoint an 8th rebbe. They’re waiting for the 7th to reappear.