Earlier quoted context omitted.
Generally I think the issue is that there's a tension between your security vs Paypal's security (deliberate, motivated bad actors). Maybe an analogy could be about using metal detectors as a layer to reduce bank robberies. A gun in a good guy's hands is a good thing to prevent robberies. Guns in a bad guy's hands are a bad thing to prevent robberies. Paypal knows you have a gun but they don't know if you're a good g…
How does a rooted phone enable bank fraud? This smells like pointless policy checkboxing.
If you run a rooted phone and download malware, that malware can gain root and do payments on your behalf.
Then PayPal has to deal with you revoking payments etc., they don't want to so they forbid you from using PayPal on a rooted phone.