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All Valve knows is you used Paypal and so Valve refunded to Paypal. You should call Paypal and ask where your money is if your Paypal account indicates Paypal already received the refund.
I realize I wrote "Paypal" eleven times up there but I didn't want to use pronouns like "you should call them" to leave out any ambiguity as to who you should be contacting.
PayPal has your money, if Paypal unable to refund the money to your card, it goes to your PayPal Wallet.
It takes couple business days, but vary on the service / services you use as depends how long they take to process transactions for incoming, and outgoing transactions, some services have much slower process for incoming transactions AKA refunds / return. So check the status on Paypal if they sent the funds back to your card, or if they're holding on to your funds, as Steam can't help you in this case as it's out of their hands.
Word of advice, if you plan to use the funds on Steam, just refund to Steam wallet as it's much quicker, and normally takes 24hrs to access the funds on the Wallet after being approved of the refund to get the money into your Steam wallet.