I looked at about a dozen websites where this case was discussed and all the stories go back to just one source: Regretsy (whatever that is).

The chances that this case is substantially (or entirely) bogus is huge.

Regretsy has a cartoon character with a huge middle finger saying "fuck PayPal".

They are clearly an activist group trying to cause PayPay damage.

That does not mean what was said is wrong, just unsubstantiated and suspect.