Proof of fulfillment after I have refunded the payment.
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Someone sent me money as goods and services, then suddenly there was an issue with my account, and now I need to submit the requested documents as proof before I can access my balance. I didn't ship the ordered item to the buyer; instead, I refunded their payment, but the limitation on my account still hasn't been lifted. My question is, do I still need to provide proof of fulfillment even though I refunded the buyer's payment because I didn't fulfill their order?
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If paypal have requested the information then yes.
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Its not just x1 order as when paypal state they require proof of fulfilment they are asking you to send any information on the products you sell (in general) and how you sell them.
They normally do not do that if you have only sold one item, it normally kicks in if you have sold a few items.
So if you are saying its just the one item then contact customer services and explain it was a one off which you have refunded?
https://www.paypal.com/cshelp/article/how-do-i-contact-paypal-customer-service--HELP378
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I am having a similar issue. I have been asked 3 times in the past 9 days for information. My account keeps getting temporarily blocked and I have to submit information such as a drivers license, proof of the transaction being shipped and now they want a copy of my bank statement. I have no idea what is going on.
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Read the link for more information.
Advice is voluntary.
Kudos / Solution appreciated.

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