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Not true, the money will go into negative and paypal will eventually get a collections agency against the seller. They do a pretty good job of connecting paypals by names, addresses, bank accounts, which is all needed to create one.
Not necessarily. If they have multiple paypal accounts. They can just withdraw the money once received since there's no hold on it. And move on to the next one. You can file a claim, win ,but if the money isn't there, you get nothing.