So I did some investigating. I tried accross different browsers, I tried changing up my behaviours (e.g, signing in to my personal account, then accessing my business account. Also tried manually changing the nation of PayPal). None of that worked, but I did find this in the developer console.
It appears there seems to be an issue with the script which would redirect the page back to Webflow and confirm that the connection has succesfully been made.
The behaviour is different between the Stripe pop-up and the PayPal pop-up. Once you confirm the connection with Stripe, the redirect page is presented WITHIN the same pop-up where you confirmed Stripe. With PayPal, the redirect page is loaded in the ORIGINAL PAGE, rather than the same pop-up where PayPal was confirmed. Perhaps this is causing the conflict whereby the script is being blocked?
Considering how critical of an issue this is, how expensive Webflow eccomerce is, and the fact 3 people have had the problem in 2 weeks - I hope this is something Webflow can take the time to look at.