I just double checked and I have TOTP enabled for my PayPal account so it should be an option.

I just found this support article of theirs and it says it can only be enabled through their website and not through the app (why?!) so you might be running into that?

https://www.paypal.com/uk/cshelp/article/what-is-2-step-verification-and-how-do-i-turn-it-on-or-off-help167