To be fair the manner in which you were defrauded for product sounds like it can also be easily done with credit cards. That being said, I'm pretty sure PayPal can also be hit with a chargeback from credit cards, which they pass to you.
Had it happened with a credit you'd not only have your funds immediately blocked for 90 days, you also get hit with processing fees regardless of if the customer was scamming you or not.
But the blocking of the funds, unlike with Cc, were the non chargebacked funds so our rolling cashflow. With Cc we only lose that one customer payment and that is it. PayPal blocks the entire account. That is very different.
Regular cc merchant accounts will do the same if they believe their risk threshold has been met and this will vary depending on your merchant bank. But I do think that PayPal's threshold is much lower than most due to the higher level of fraud and the fact that no human being seems to work in their customer service and risk management departments. It's all bots, all the way down.
Had it happened with a credit you'd not only have your funds immediately blocked for 90 days, you also get hit with processing fees regardless of if the customer was scamming you or not.