Bifunctional diterpene synthase that directly generates the endocyclic double bond, as well as the hydroxyl group: produces an endocyclic double bond isomer of copalyl diphosphate (CPP), and carries out subsequent replacement of the diphosphate by a hydroxyl group to form (13E)-labda-7,13-dien-15-ol. geranylgeranyl diphosphate + H2O = (13E)-labda-7,13-dien-15-ol + diphosphate Binds 3 Mg(2+) ions per subunit. Secondary metabolite biosynthesis; terpenoid biosynthesis. The Asp-Xaa-Asp-Asp (DXDD) and Asp-Asp-Xaa-Xaa-Asp/Glu (DDXXD/E) motifs are important for the catalytic activities, presumably through binding to Mg(2+). Selaginella moellendorffii contains two distinct types of functional terpene synthases (TPS) genes, the typical seed plants TPS genes (SmTPSs) and a microbial type TPS genes (SmMTPSLs). Belongs to the terpene synthase family.