If we start with few foxes and many rabbits, fow a while the rabbits will increase. It will take time before the foxes catch up and they will both go extinct. Here is an example:
mat = {{6/10, 1/2}, {-(7/40), 6/5}};
f[t_] = MatrixPower[mat, t];
ParametricPlot[f[t] . {0, 1}, {t, 0, 30},
PlotRange -> {{0, 2.1}, {0, 2}},
AxesLabel -> {"foxes", "rabbits"}] /. Line -> Arrow
Using discrete steps:
mat = {{6/10, 1/2}, {-(7/40), 6/5}};
f[t_] = MatrixPower[mat, t];
pts = Table[f[t] . {0, 1}, {t, 0, 30}];
Graphics[{Arrowheads[{.05, .05, .05, .05}], Arrow[pts],
PointSize[Medium], Point[pts]}, PlotRange -> {{0, 2.1}, {0, 2}},
Axes -> True, AxesLabel -> {"foxes", "rabbits"}]
Your initial picture only shows the regime where both decrease.