Baer–Nunziato (BN) type models introduce fundamental and widely used class of multi-fluid and multi-velocity models to describe evolution of multi-phase flows. The original BN model is supposed to describe multi-phase flows at spatial scales substantially larger than the characteristic scale of elements of the dispersed phase. Recently a number of attempts have been performed to apply it to the description of multi-phase flows with resolved, at the large spatial scale, inter-phase boundaries. A number of still not well understood issues arise in this situation, related to the complex interplay of the topics related to (i) justification of the hierarchy of BN-type models for diffuse interface type description of multi-phase flows with resolved inter-phase boundaries; (ii) the questions of “correct” definition of generalized solutions of first order quasi-linear hyperbolic systems and (iii) development of “really” path-conservative and asymptotic preserving schemes for quasilinear hyperbolic systems with stiff relaxation terms. The goal of the paper is to study numerically such interplay when BN7 model is applied to describe 1D two-phase flows. Our main target is the diffuse interface type formulations. The obtained numerical solutions are compared to analytical solutions of the “more equilibrated” BN5 equations and heterogeneous formulations for the standard Euler equation. The goal is to provide factual information for the performed tests. We also try to summarize the obtained results in a systematic way from a practical point of view. To avoid ambiguity in interpretation of the numerical results, we provide detailed description of the algorithms and perform a number of auxiliary numerical tests.