My advice is walk away. This seller is absolutely full of crap
The "meta" factor here is that Paypal either has or has not yet implemented an IRS-mandated reporting mechanism to compel sellers who accept money via Paypal’s "Good and Services" feature, to declare proceeds of the sale on their taxes. It’s actually more nuanced than that. Most individual (regular people) sellers accept less for their F.S. item than they paid, and thus have no profit to declare from the transaction.
Having said all that, this G&S vs F&F thing has prompted many sellers to demand payment only via F&F. These are people who, a couple years ago, would have accepted G&S payments, w/ or w/o bulking up their price by ~3% to offset PP charges. But now many many sellers advertise payment only by F&F. They’re either misunderstanding the IRS mechanism involved--or just opportunistically using it as excuse to not accept G&S payments. .
I’ve interacted with a number of such sellers. For any item going for a few 100 dollars, I’ll play along. But for anything more expensive & larger, no way I’ll do F&F with a total stranger. I’ve gotten a couple sellers to accept my G&S payments; I’ve walked away from 2 or 3 sellers who would not.
The plain fact is that some % of sellers are dishonest, and this F&F thing only increases their number and gives them better cover to scam others. Don’t fall for it.