It is possible to use PC_07 as GPIO or other instead of SYS_FAULT.
The default PC_07 pin function is SYS_FAULT.
The Fault functionality needs to be disabled in order to use the pin PC_07. It can be disabled by setting "FAULT_DIS" bit in the Peripheral PAD configuration0 (PADS_PCFG0) register as below snippet.
*pREG_PADS0_PCFG0 |= BITM_PADS_PCFG0_FAULT_DIS;