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I also tried to learn from Steam Support any kind of id or token that is being sent over to PayPal ("paypaltoken"?) for failed attempts, but the question was ignored. I also said that i'm open to report any other information from dev tools they might need, but that was also ignored.
Set Pay Pal as your preferred payment method.
Are you using Steam client or web based steam? you are loogged in at web Steam.
https://store.steampowered.com/account/
Just to be on the same page - how do you do it exactly? Steam is actually trying it's best to make me spend my Wallet money first (i don't want to, atm). But, if you mean "associated payment method" on https://store.steampowered.com/account/, yup, my PayPal account is there.
Like i said in the first post, i tried web in Firefox, i tried web in Edge, i tried client, i tried mobile app.
Here's a whole discussion with Steam Support, btw - https://imgur.com/a/77gfIVy.