I googled fuel filter direction and can't find out for sure why it's so bad to install it backwards. It possibly could restrict flow.
However, I think it was a mistake to reverse it after 700 miles. Some junk could possibly have been caught by the filter on the end towards the tank. Then if you turn it around, the end with the junk is now being back flushed towards your engine and injectors! I would change it again with a new one.
I'm on my fourth fuel filter and I always use a black magic marker to draw a BIG arrow on the filter so I don't mess it up.
Our fuel pump is in the fuel tank, so it most likely was not affected.
Mark Griffin