I think there is no way to respond to this without providing ample machinery for people to take out of context so I'd write a proper article on this at some point.
But suffice it to say for now that the same Jesus also said "judge righteous judgment" (John 7:24), nothing in Matthew 7 prevents us from making judgment calls on people long as they are on a righteous basis. Jesus judged the Pharisees hypocrites, Paul judged sin in the Corinthian church when a man slept with his father's wife, Paul judged the Galatian church when they were retrogressing into legalism.
I'm guessing you don't believe Matthew 7 means no professional judge in a law court can be Christian...afterall God Himself gave Israelites judges, there is an entire Old Testament book about them. ..just food for thought in the meantime...
Now to clarify the "deserving" part.
If you know someone has a track record of paedophilia, would you let such a person babysit your child? If the answer is no, are you then judging them by not letting them do so? Are you judging a criminal when you say he deserves to go to prison? Definitely...is that a fair or righteous judgment? Of course it is..
We respect people who are deserving because some people by their character/actions make themselves undeserving of respect sometimes (e.g a paedophile or a serial rapist or someone who would rather scam people off the internet than make an honest living or someone who would bomb a building with people in it, a compulsive liar). Obviously it's not cut and dried even at that so it's not a case of having these iron clad categories that dethrones somebody from our respect if they do these things...just a snapshot illustration of what was meant by the "who are deserving" line
Hope that makes a little bit of sense at least,