Correct, Paypal does freeze accounts in case of fraudulent transactions and/or stolen CCs being used. This is normal for any provider and not exclusive to Paypal
Saying that " lots of player in wurm online had their problems with paypal aswell!" would indicate that Wurm is the problem because rest of the world pretty much hinges on paypal's reliability and security, including biggest companies out there. Paypal protects both sides of the transaction. If someone uses a stolen CC to donate to Sklotopolis, Paypal is that shield protecting Dominikk from all kinds of legal trouble or at least bureaucracy and explanations which follow in such incidents.
I know for sure that i wouldn't accept payments without that additional layer of protection between my business and people trying to use stolen CCs to buy my product.