I've tried searching to no avail online at PayPal for more details on the policy against using the PP debit card for anything other than online eBay or similar purchases. I get e-mails all the time from PP saying I should use my PP debit card for 1 pct cash back and special offers if I go spend here or there using the card.

So it would seem to not make any sense if their "real" policy is that you cannot use this PP debit card for anything else besides eBay or "online" purchases.

Does anyone have confirmation from a letter or online document that explicitly spells this out?

Worst case I'll just go back to buying money orders with regular OVs then.