Yes, if you are under age 59½ then the 10% penalty will apply. The income tax and penalty only apply to the earnings of $3,000. The excess contribution of $7,000 won't be taxable.
If you do not remove the excess contribution then you would have to pay a 6% penalty each year as long as the excess is left in the account.
To verify, your 1099-R has the total distribution in box 1 (excess contribution plus earnings) and the earnings in box 2a.
Please see What happens if I made an excess Roth IRA contribution for additional information.
[Edited 1/27/2022 | 8:54am PST]
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