Relax. Paypal isn't going to fine anyone.
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For anyone curious, here was the original text:
Compared to the current policy, section 5 is (or would've been) completely new. All the other language is identical.
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The current policy:
https://www.paypal.com/us/webapps/mpp/ua/useragreement-full?locale.x=en_US#restricted-activities
https://www.paypal.com/us/legalhub/acceptableuse-full?locale.x=en_US
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So I would have to agree that a whole new section like that probably was not an "error".
However, other payment processors do have some similar language about not allowing their services to be used for illegal drugs or by hate groups or whatnot. I suspect that's what the intention was, but it seems like someone went a little far and/or was too broad.
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