People tend to use scam so much even if it is just a bad service.
I haven't use or read the TOS of Paypal regarding to crypto or Bitcoin but I know that one thing OP tells is true if we use them as Bitcoin wallet we wouldn't own or hold our own private key.
You don't hold anything. As long as you only have the ability to purchase and/or sell it, it's exactly like me selling you a paper with "Bitcoin" written on it for $16k, telling you that's your coin. It doesn't work that way. I
highly suspect their Bitcoin is not the Bitcoin we know.
And I think it is only the beginning they would improve their service in the future (Hoping for those who would use their service as a crypto wallet).
I have one question I think is quite important: why be in such a hurry and push this so-called "Bitcoin adoption" without the
most essential features such as withdrawing or sending when you have had an issue as a corporation with Bitcoin for many years straight? Why not just delay it for one more month or two and make all these other features available as well?
I can answer this very easily: because when there's no demand for it, you don't
need to make it available. So why put everything out there for your users straight from the start when you could start from the bottom and only make available the most-requested features instead?