Is it possible to install a custom ringtone using iTunes 12.7 or later?
Yes. You can manually drag your ringtones into the device connected with iTunes.
Apple has an updated article here.
I confirm the answer by Cykor: once installed the iTunes 12.7 version, and with a device connected, there is no more a "Ringtones" section under the selected device; but dragging a .m4r file over the device sends that file to the device. That file will be usable as a ringtone for any event or contact. If the file is not the correct format or size (too long, for example) an error window will appear.