Perhaps it's stance has changed since it began doing business.
That is a very well known fact in the gun community. Almost no gun dealers use paypal anymore and if they do they have to hide the nature of the transaction. That is what gave rise to GunPal. Pretty much the same rules as ebay. The following is paypals rules:
FIREARM PARTS AND ACCESSORIES
You may not use PayPal to purchase or sell any firearm receivers or frames, components and parts of receivers and frames, or “cut” or “80%” receivers. PayPal also does not permit assault weapon-related parts and accessories, firearm silencers, and kits designed to convert a firearm to have automatic firing capability. This includes the sale of any parts or accessories prohibited for sale by the National Firearms Act or other federal or state law, including items related to short-barreled shotguns or short-barreled rifles, fully automatic weapons, large-capacity magazines, multi-burst trigger activators and camouflaging firearm containers.
For more information about the National Firearms Act (NFA) and its requirements, please refer to the Bureau of Alcohol, Tobacco, and Firearms website.
AMMUNITION
You may not use PayPal to buy or sell high-capacity magazines (those which hold more than 10 rounds), ammunition with propellant (e.g., gunpowder), or blank ammunition. The term “ammunition” means ammunition or cartridge cases, primers, bullets, or propellant powder designed for use in any firearm.