They're almost certainly using the
IANA Timezone Database. Even with a highly customised Linux distro like Kobo use it's just not worth re-inventing this particular wheel. Also the give-away is the the "choose a city" approach which is how the tzdb is organized.
The environment variable davidfor is probably thinking of is TZ which you would set to GMT+7. But then you would need to set it and (re-)launch Nickel. Unless the Kobo developers have done something very strange that should cause the time to reflect your timezone.
Honestly though it's much easier to set this stuff through the Kobo settings. Ho Chi Minh shows up in my Kobo Clara HD settings (fw 4.24.15676). As do Phnom Penh and Vientiane. They're all +7 timezones without DST.
What does your timezone show up as at the moment if you go to settings->date and time?