I'm going to be somewhat direct here.
I allege that what Paypal is doing here (holding funds over 10 days) is illegal.
In order to do what Paypal does in the USA, you need licensure. They point out that they are not a bank. Indeed, they aren't: in many states they are classified as a money transmitter. In 8 states, they have no license to operate.#1
What is this money transmitter stuff? In essence, the law in all the locales I have checked (I have not gone through every one), indicate only a short holding period (5-15 days) and only allow holding of money of a known crime.
So indeed what they do is absolutely fraudulent. In other words, if you have a patent troll corporation with many lawyers, target Paypal for their illegal behavior.