Some types of headbands can be painful to wear to some people. I used to wear headbands a lot as a kid/ teen, and I can tell you from glancing at the photo that the one you used would be most likely to give me a headache, too.

With that said, however, stick to your guns. Your ToS is your ToS, and if they take it up with Paypal, call Paypal and talk to them. Usually Paypal tends to be a lot more helpful when you're talking to a person. I'm pretty sure Paypal will side with you.