This is a hoax. PayPal retracted on their statement that never took place (was just a proposal). The "up to" $2500 fine for illegal activities is something that has been in place for ages, in fact, more than a year than they don't update their original AUP
The problem is that they were going to extend that fine to more subjective scenarios where they will become jury ,judge and executioner.
PayPal is grievous, but is what it is. Not more, and not less. No need to kick them more when we all know that they are already down (moreover, with hoaxes).