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From first hand experience, I can tell you can be adversely affected when someone you deal with has their account investigated, as the transactions themselves become part of that account's investigation and what seems to be a for a specific time frame.
Paypal's policy is not limited to adult transactions. Rather, they have to comply with rules governing the handling of transactions, both foreign and domestic. It's unfortunate that it can indeed disrupt innocent bystanders as it were. But in the end, things get worked out for anyone complying with the rules.
Hehe, I remember one time sending $150 to a person in Australia and that person actually getting a call from Paypal asking what it was for. For $150. Not $1,500, or $15,000 -- we're talking $150 (hmm, hearing Allen Iverson in my head... "we're talking about practice"). Just a little programming fix I needed.
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NSFW
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