Thanks for dropping by the PayPal Community. Good question about refunds.
How a refund is credited depends on how the original purchase was funded. If you paid with your bank, the money is refunded to your PayPal account balance. After you have received the refund, you can withdraw money from your PayPal balance to your bank account. If you paid using PayPal Credit, the amount is refunded to your PayPal Credit account.
For this situation, I would encourage you to review the original payment details in your Activity to double check the payment method. Once you identify the original payment method, you can use the link provided to determine how you've been reimbursed.
I hope this helps!
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