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In future use missing parcel or package not arrived with PP claims it’s likely not to work. Most PP claims are automated and they will see a tracking and disregard it.

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PP need proof that you have tried to resolve with the company before making a claim. Getting any response from the business inform of an email is great as you can use inspect element to edit it to see how you see fit ie simply we cannot help you if the item you received is incorrect.

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PP automatically refund after 7 days - as it’s automated the only mail I got from them is a refund being processed - no information about returning anything

Update:
Success! I just received an email from PayPal stating that the case was closed in my favor.

So if I am reading this right, both of you were able to successfully SE microsoft with the help of PP using slightly modifed methods;

bburnsey, you had modified a response from microsoft to make it look like customer negligence (we sent you the wrong item and we dont care/cant do anything about it), and sent it to PP for a WIR claim,
and Kilra, you simply sent an MEB claim to microsoft (to their official support contact/email I assume) - and knowing that they wouldnt respond to your email for whatever reason - you used that to your advantage and had PP end the case in your favour?

So for anyone trying to attempt this, hoping that MS wouldnt respond would be a gamble, as bburnsey was able to illicit a response, so I assume that one way to go about this is to claim WIR or faulty item? But now that I think about it, bburnsey's method is quite powerful as whatever MS responds, you can just modify to your likings, either that or they dont respond. But one question remains, what if PP contacts MS to verify your claim?

Correct. Worked like a charm.
Good luck to anyone trying with MS.

Sorry, but what does MEB stands for? thought it was another way of saying PEB or EB but someone stated otherwise so I got no idea