I mean you put a loose larger washer than the hole on the molly you are mounting!
The diameter of the current hole is about 12mm and the expander for my screw is 7mm. Can I put an expander even though it is considerably smaller than the hole?
You get a washer with a 7-8 mm hole and an outer diameter well over 12 mm. Sometimes called a fender washer.
Bend the legs out a bit so the Molly can expand as it should.