I don't understand what the difference is between Paypal's handling of payments and remittance of funds, which are governed by its contracts, and the terms and conditions of the work we do, which are also under contracts.
If someone chooses not to read the TOS, that's on them and it is their failure as a business operator. If they wanted to renegotiate the standard terms of the TOS, they should have approached Paypal before agreeing to the TOS or before launching their business activities.
It's not a hostage negotiation--there's no requirement that you start using, or continue to use Paypal.