Is this a correct way of doing things?
My sensor outputs 7.5v 100/150mA when its high.
Its not a sensible approach IMO, a resistive divider might be sufficient.What does it output when low? How fast does it switch between high and low?
QuoteIs this a correct way of doing things?No. Do not use a voltage regulator for signal level shifting.
It will not be stable and will not respond fast.