I can confirm 100% if you have no funds paypal will send debt collector after you.
Some random lawyer/collector sent me a letter to collect my ~$4 I owed.... And that was after not paying for only like a month....
Im in AUS aswell.
Not if my paypal isn't linked to my bank account, so no direct debit options, and there are no funds in my account because I withdraw all funds as soon as they hit paypal. I wonder what would happen then?
edit: also, there are no credit cards attached to my paypal for them to charge either.
That would be interesting to take to court. In fact, i'm almost curious enough to have a friend try a chargeback to test how their system works.