Sold a phone on Swappa

Yup, more than likely.

Don't think you can do anything else. If they're not happy with the purchase, you can't do anything.

almost 2 months? Doesn't Swappa have some guidelines with this and the window for buyers remorse?

Have you asked the buyer what he wants to do?

I would tell him it’s too late, but unfortunately if he files a Paypal dispute, they will side with him and put a hold for the full amount on your PayPal account.

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I think Swappa follows PayPal’s policies?

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This is what I see:

Returns and Refunds
Sellers are urged to outline return policies for their listing. All return policies must comply with Swappa's site-wide policies.

If an item is received not as described the buyer shall be entitled to a refund.
Sellers should refund promptly for returned items after received.
Swappa will refund sale fees to buyers when a sale is voided due to fault of the seller or Swappa.
If an item is received as advertised, but the buyer wishes to return ("buyer's remorse"), the seller is not obligated to accept a return except in compliance with the stated voluntary return policy. Any refund in "buyer's remorse" situations should be less any fees already incurred by the seller. Swappa sale fees are not refundable in such situations.
Refunds are subject to PayPal's refund policies and limitations.
If an item sold on Swappa becomes blacklisted, through no fault of the buyer, outside of PayPal's refund window the seller is expected to provide a reimbursement for the market value of the device or a comparable replacement device to the buyer.

That is Swappa’s policy, but unfortunately since the buyer paid through PayPal, they are protected by Paypal’s Policy.

What happens if you receive a device back, in this case, a phone that now has damage and was not damaged prior to original sale? Seems like one big fiasco in the making or the potential to be.

Try trading it in at Best Buy. I got $130 gift card for an iPad that was old as hell and would not fetch $40 on the open market. The inspection process was, “Does it work?”