Not sure if PayPal has changed the way it operates since, but here's an experience from a few years ago...
A buyer contacted me online wanting to talk on the phone about the watch that I was selling on eBay, all good. The deal was done, postage arrangements agreed and the excited buyer proceeded with the full PayPal payment, he stayed on the phone whilst I checked and confirmed that the funds had arrived. I promptly transferred the PayPal funds to my bank successfully, all still good.
shortly after, the buyer called me again and was very excited to say that he (unexpectedly) could make the 150 mile journey to collect the watch that very day, rather than risk/wait for postage etc. and I of course agreed that this was fine (I supposed that it was his watch now). Several hours later he arrived at my office, my colleagues were present and CCTV was recording as he signed a receipt for me. He took possession of the watch and left a happy man, still all good I thought.
It turned out that the PayPal funds he'd used to buy my watch (and actually several others that day.. also strangely a few jet skis too!) were acquired by selling a large amount of bargain iPhones on eBay but posting only empty packages (he'd contacted me before all the bad feedback arrived of course). The iPhone buyers, all of them with the same complaint could recover their payments through PayPal and PayPal could recover those funds from all the watch and jet ski sellers. Even if the funds were no longer in the PP account, or indeed the linked bank account (which apparently you agree in the terms and conditions to allow PP access to).
To benefit from any sellers protection, what was needed was "proof of postage", nothing else would do. Not witnesses, not CCTV etc, just proof of posting something (anything!).
Personally and needless to say, I'm a little cautious about considering PP funds these days .
Perhaps I should have seen it coming, but I didn't, hopefully the next person will. But looking back, if I was to identify just one "tell", then it would it be that he never tried to knock me down on price.
All the best, to buyers and sellers alike