I believe this answer is incorrect. When purchasing through Steam I have no problem and the amounts I spend there are significantly larger than my marketplace attempted purchase today.
I don’t believe it can be region either as I am in NZ and there are very few restrictions on our transactions.
I think it is the way that Epic have integrated PayPal payment, maybe they have set a flag that insists on an alternative payment system in case, as you say, the funds are not available in the standard balance… however in that case the transaction should be refused by PayPal and Epic anyway.