if you file a legit claim, they do not freeze the account until they have ruled in the buyers favor. Then they take it straight out of the credit card or linked bank account. The only problem is, the people that rip you off, usually do it because they need the money right away. therefore months after the claim is settled, they usually dont have any money for Paypal to take, and there is nothing you can do short of filing legal charges. Paypal wont eat that loss and will not refund you the money even if they determine you were defrauded. PP's buyer protection is great, but it is not something you can 100% rely on. More times then not, in my experiences and those of whom i have heard, there was no funds to be recovered.
On another note, people saying that BF should require no fees passed onto the buyer($xxx + 3%) since it violates the ToS of Pp, I understand that view, but BF would then also have to ban the selling of balisongs and Auto's via PP since that is also against their Terms of service. A company cannot pick and choose which terms to follow and which are okay to circumvent. I do not see that happening though, i believe it should be left up to the two people participating in the transaction.