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No, PayPal is not part of the scam. Just crafty sellers trying it on.
I do not know the extent of the info and how they confirm the tracking info through their API with the shipping company but maybe the only info it can check for is the status, city/state/zip/country in the automated sense. Such situations have to be reviewed by a human so you gonna have to appeal. Reach out to customer service at the message center: Click HELP at the top menu, click MESSAGE CENTER under the search bar.