Earlier quoted context omitted.
As another data point: MSFT have some sort of open mail server/service called onmicrosoft.com which (in my experience anyway) is only being used to send out fraudulent paypal messages. Because it lets the spammer set the From to service@paypal.com and also contains valid DKIM etc, it sails past spam filtering. There are so many complaints about this on (real) paypal.com forums, but Microsoft are apparently unable to…
How would Microsoft forge a DKIM signature? It sounds more likely that it's just a shitty email from Paypal.
The To: header _is_ part of the signed material so will list the original recipient not the victim — but the attacker sets the recipient name/address to something misleading like “Order Received” to obscure this, and sets the store name to some long text that will be misleading when templated into the PayPal invoice request mail text.
PayPal have long had a problem with failing to make untrusted supplied text clear in their communications, but this is an unusually convincing attack.
I don't know why they always use (compromised?) onmicrosoft subdomains in particular. In the samples I've seen they're getting an SPF softfail so it doesn't seem MS's relays are passing SPF for paypal (sendgrid's might...)