Remember when in the aftermath of Katrina, Paypal seized donations fundraised from Something Awful intended for the Red Cross for "fraud" and then refused to release them even when everyone told them they knew full well what was going on? After they got called onto the mat they finally agreed to release the funds but only to one of their own selected list of charities, all of which had vastly greater overhead expenses. In the end Lowtax finally had to tell them to refund everyone and have them make individual donations instead.
Paypal is shit, the best thing you can hope is that you fly under the radar, because the horror stories are very real. They are not a bank, they are an unholy, unregulated "money transmitter" and if they choose to screw you there is nothing you can do about it. Have fun with your mandatory binding arbitration.