"It's perfectly reasonable for Paypal to decide their own business model."

The same could be said for just about every other business that fails.

And I don't believe that is reasonable to freeze transactions of business based solely on some sort of suspicion of guilt, then after it has been resolved that they are indeed innocent, continue to hold their money for months after the fact.

The horror stories of paypay have been floating around for some years, this story is nothing new.