They should release the funds. Just a matter of time.
All you need to do now is hope you don't get chargebacks from the customers for ⊗⊗⊗⊗ goods, cause then you will just lose all the cases. Hopefully you will get the option to have the items returned back to you at least...
There is an automatic payout upcoming on the 6th of January too. So hopefully they will release your funds then.
No,for counterfeits,she would not get her payment.
Buyer does not have to return the item,there was a time PAypal will ask the buyer to destroy the item,no return so it cannot be sold again !