An update: this does NOT appear to be the case. I have tested it, buying NSFW content here with my own Paypal account, had no issues, and have yet to have my account disabled. This also makes logical sense: If Paypal DID have an issue with Itch, there's not need or reason for them to go around sneakily nuking customer accounts: they could (and almost certainly would) either demand further censorship or just stop providing service to the site completely.
My condolences to Golgom, but it looks like his account termination was a one-off unrelated to Itch. Paypal has a long history of being oddly sensitive about a vast number of inscrutable things, which is why, although using the service to make purchases is generally fine, you should never, ever leave money in a Paypal account any longer than you have to.