I had this issue as well and called PayPal support several times. Finally, a support representative said he turned the option on in our account, but I am still seeing the error.
I found this page explaining error code #11601:
https://www.paypal-knowledge.com/infocenter/index?page=content&id=FAQ2035&expand=true&locale=en_US
The issue is regarding the option SetCustomerBillingAgreement
, which initiates a billing agreement and has been deprecated since v54.0 of the API (view Merchant API Release Notes).
We are on Magento 2.1.7
and recently billing address information stopped being returned from PayPal API requests - the Require Customer's Billing Address option seemed promising.
I am going to leave the Stores > Configuration > Sales > Payment Methods > PayPal Express Checkout > Advanced Settings > Require Customer's Billing Address
option set to No
and look further into it.