Dollars first, because that is what PayPal settles in. Name the recipient and set an amount; the recipient goes into the order before anything is authorized, so the money can only land on the account you named.
Dollars out of your PayPal balance, to a person by their PayPal email. Nothing is converted — one dollar leaves, one dollar arrives.
PayPal · live
The recipient must have a PayPal account. In this sandbox that means one of your test accounts from the developer dashboard — any other address is refused when the payment is authorized.
No conversion — this rail moves USD as USD, so the two figures are the same number by construction, not by assumption.
Drafting writes the order and its recipient. It does not move or reserve anything.