I am trying to use PayPal as payment method to purchase games on Steam.
However I am not able to due to the restriction on my account.
I contacted Steam about the issue and they responded with this.
The only way to remove the ban on this payment method is to reverse the disputed charges with PayPal. However, since this dispute occurred in 2019, it may not be possible to have the dispute reversed.
You are more than welcome to reach out to PayPal and see if they can reverse the disputed charges despite the time its been. Unfortunately if the funds are unable to be returned to Steam, you will need to use an alternative method.