WTF? No...when we had money frozen we always received it back after 180 days. After the 180 passed only thing to do is to withdraw the money to a bank account. This has always worked.
PayPal has a policy called Acceptable Use Policy, if you violate it, they can fine you for $500 per violation:
10.5 Acceptable Use Policy Violation - User Fines. If you violate the Acceptable Use Policy as set forth below in clauses (a), (b), or (c) below, then we may fine you $500.00 USD for each such violation and may take legal action against you to recover additional losses we incur. You acknowledge and agree that $500.00 USD is presently a reasonable minimum estimate of PayPal’s damages, considering all currently existing circumstances, including the relationship of the sum to the range of harm to PayPal that reasonably could be anticipated and the anticipation that proof of actual damages may be impractical or extremely difficult. PayPal may deduct such fines directly from any existing Balance in the offending Account, or any other PayPal Account you control.
If you had multiple violations, they deduct $500 per violation, so you won't be able to withdraw the full amount, if there's any money left at all, after they're done.
This is what must have happened to the guy. Your case was different, if the full amount was available to withdraw.
trust me PayPal do what they do because they can that's the only answer i was selling CODING digital services 100% satisfaction 0 refund requests 0 dispute neither from me or from others a personal computer clean with no virus/proxies or anything that can look suspicious for 5 years was doing that and they hold my account for 180days i called every day waited for 20~30min to get answer talked to support for hours passed 3 levels support and all says that he can't say why that's a private reason that they can't tell me about it after 180 days the money was transferred tp PayPal benefits 3K vanished and couldn't get it by any way
It's not the disputes or user satisfaction. Selling digital services can be risky. If you were coding bots for social media sites for instance, someone or the site itself can report you and you'll lose your account. If PayPal deducts money (on top of which is reserved for disputes, if there's any), that's always because according to them you violated their Acceptable Use Policy and they can deduct $500 per violation (see above). This can include many things, sometimes not even spelled out. So yes, it's in their discretion to rule against you.
Fiverr has a very vague rule: if you violate the TOS of a 3rd party site, you violate the rules of Fiverr. Nothing is spelled out, it's a general rule. E.g. you make a gig about selling Twitter followers. You can't do that, because it's against the Twitter TOS, which makes it against the Fiverr TOS, but you won't find this spelled out anywhere in the Fiverr TOS. If they catch you, your account can get suspended, earnings forfeited in serious cases. I just mentioned this example, because it's easy to understand and this is something similar to what PayPal does. PayPal can't/doesn't actively monitor for this, but if someone reports you, they take a look and they can shut you down, on top of it, fine you. Right in the moment when you started to use their service, you agreed to this.
If you think back what kind of tools you were coding, you might be able to have your answer.