4.1 Receiving Personal Payments. If you are selling goods or services, you may not ask the buyer to send you a Personal Payment for the purchase. If you do so, PayPal may remove your ability to accept Personal Payments.
Also, the "Payment Owed" option is not supposed to be used for sales. So if I sell an item, and have someone pay me with the "Payment Owed" option - I'm still violating the rules for my account. If that's a risk people want to take, then fine, but it's not just that you have a preference to choose to have the paypal protection or not when selling items. If selling items, they are supposed to be paid with the "purchase" tab and not the personal tab.
Finally, this from Paypal:
"Are personal payments that I receive counted in the total that will be reported to the IRS?
No. Personal payments that are not payments for the sale of goods or services will not be counted when determining if the IRS thresholds have been reached and will not be included on your Form 1099-K if you exceed the thresholds."