Paypal doesn't work on LineageOS since a long time, even though the connections of that dubious Graphene distro with the US government are always in the horizon it is just natural that paypal doesn't work there now.

Otherwise it would just continue to raise suspicious that Graphene is favored by governments and big tech.

It does work for me on lineages for microg with an Xperia 5 II. Haven't tried to activate contactless though.