why would paypal denied a case where seller sold me a counterfeit item
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In the event of an item received but not as described dispute the item has to be significantly other than as described.
You bought a purse and received a purse so that would not be considered significantly other than as described.
However you said it was fake, so did you provide proof? Paypal can't just take your word for it, you would have needed to have provided written proof from a store that sold the item or the company that made the item.
Even then if the item was shipped internationally it may still not work as its legal to sell fake goods in some countries like China so buyer beware.
If you funded your paypal payment via a credit card then see if your card issuer will help you?
Advice is voluntary.
Kudos / Solution appreciated.

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