Paypal can suspend your account if you receive "gift money" when it was in fact for a service/purchase the sender made, so careful with that. If you declared the amount you received from him for the spotter, you did the right thing.
Whenever I do paypal "gift" I do it very discreetly - no messages via paypal, no mailing address, etc. If you keep it discreet, I think you are fine. I've even bought and sold several guns and exchanged the funds discreetly by paypal without issue.
