Oddly, I have actually been told in the past by PayPal to file a $1500 dispute with my credit card company (AmEx in my case) because for whatever reason they couldn't handle it internally. Didn't get banned.
Nope, still use them for a handful of things (for convenience.) The charge-backs were of significant size too ($300-$500.) This was around 2012-2013 for one and around 2015 for the other.
In both cases, Discover approved charge-backs for the PayPal charges to my card.