So PP is ok if you don't mind holding your crypto with them long term.
Please don't do this. We're even discouraging people from using centralized and known crypto exchanges to keep their funds there for long-term holding. If you're going to hold long term, leave PP and use a hardware wallet or electrum for Bitcoin.
"Not your keys, not your coins".
Cool, yeah. That would be the ideal. But honestly most people are too dumb for a hardware wallet, they will do something dumb like store their seed phrase in plain text unencrypted in the cloud or something...
I don't think so, that's the reason why those who availed of hardware wallet feel safer. It is not 100% foolproof but it's reliable and at least it's way better than keeping it to the exchanges that we have and even in PayPal. And about keeping it on cloud storage, that's also the same on how you thought keeping your money in PayPal in the long term so, it doesn't makes sense that someone has purchased a hardware wallet and kept his seedphrases on a cloud storage, don't do it as well.