As tr-1 indicated, those photos are in a temporary cache, and are encoded so that only Google's Gallery app can read them. They don't show up in an app like QuickPic because of the special encoding, similar to the music downloaded from Google Music for offline listening can only be played using the Google Music app.
If for some reason you don't want your online Google photos to automatically download to the cache, I think you can do this by disabling auto syncing. In Gallery, go to the menu, then tap Settings, then tap Google Photos Sync is On. The Sync window will pop up. Don't uncheck the Auto-sync App Data box. Instead, tap your Gmail account name. This brings you to the complete sync settings menu (you can also get here through the Android settings menu). Scroll down the list to Google Photos and uncheck the box. Your online Google photos will no longer be automatically downloaded to the cache of your N7 (at least that's my understanding).
If you always want certain online photos available on your N7, then go the the Gallery menu and tap Make Available Offline. Then choose the online folders you want to always have available.