My Wife has had a small home-based business for 10 years and her customers pay through PayPal about 50% of the time. It was going great until she had a major surgery and put her business on hold for a few months. When she was able to resume, PayPal decided, seemingly arbitrarily, to hold all customer payments for 21 business days going forward because her sales had dropped. That's all, that's the reason that was given to her.
As a small business, this is devastating and there is absolutely nothing that can be done about it unless she increases her sales back to what they were previously, which unfortunately is unlikely given the inflation and economy here in the US. Anyone who runs a small business knows that you need cash to buy more inventory, and if your liquidity is sitting in PayPal so they can get interest on it, your sales are going to slow way, way down.
In 10 years (nearly 11) she has had one customer complaint through PayPal. The customer said she never received her item because, according to the customer herself, it was stolen from her porch after USPS delivered it. In what world is that the seller's fault? Only in PayPal's (and apparently this particular customer).
That is an incredible track record given that period of time and the number of sales she has had (10s of thousands of purchases over that period).
Many of her customers have said they would go elsewhere if she drops PayPal as a payment provider, which will only make things worse (much of her business is repeat business, like 80%).
PayPal finds or manufactures reasons to hold the money you worked your butt off to earn so they can sit on it and, I guess, earn interest. You have no recourse. Zero.
Stay far away from PayPal.