To be honest, I'm not sure but just wouldn't do it in case. If they are collecting then they can pay cash or a bank transfer. I know some buyers might not have the money and want to buy on credit, which they could do if paying with PP, but I just wouldn't risk it. PP have their rules and if you break them then they don't care if you're being scammed or not, they will follow their rules.
Maybe worth looking up whether it would apply to collection only sales, but I've a feeling you could still be scammed as the buyer could claim that you agreed to post/courier the item to them if they paid via PP.
For me personally, if anything is being collected then it's cash or bank transfer, or no sale.