Yep, it looks like you still have to record these refunds manually; otherwise your PayPal balance and your net sales numbers will end up increasingly off.

The deeper problem here is that Intuit knows exactly how sticky their Quickbooks product is (i.e., extremely high effort to switch your books over to a competing service) -- so every time a stubborn issue like this rears its head, all twelve of the people tasked with answering the question, "Does this use of engineering time make us appreciably more money?" all come to the same conclusion: No, it does not. (Incidentally, this is also why Quickbooks customer service sucks so hard: lots of "I feel your pain" and "it personally hurts me to the core of my being when someone is having a bad experience with our product" followed by "have you tried turning it off and on again and/or executing some obnoxious, time-consuming workaround?" And it is also why prices have gone up like 300% since we started with them in 2015.)

This whole situation is, of course, a ticking time bomb for Intuit: The instant a competitor shows up with a similar UI, decent banking integrations, and an easy on-ramp to port data over from QBO, there will be a massive exodus of customers who have been inwardly seething in rage for years but haven't felt that they had a viable alternative.