I agree the documentation is confusing. PayPal is not supported for payments in ZAR on Squarespace because, although PayPal supports South African accounts, they do not allow you to receive business payments in South African Rand (ZAR). With PayPal, you can be paid in Dollars and then transfer your USD balance into an FNB bank account as Rand at the prevailing rate.
I hope that helps to explain. In the meantime, you may want to consider using an alternative to the Squarespace checkout. As mentioned above, my guide may help: Using Squarespace in South Africa with PayFast, Netcash or Rave.
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