Hi,
As Jerome told you, we are correctly sending them a value for their "no shipping" option, and as it's said on their documentation :
No shipping: Based on that option PayPal will display the shipping address form or not:
2 Required -> prompt for shipping address, and require one
1 Yes -> do not prompt for shipping address
0 No -> prompt for shipping address, but do not require one
So the solution, is to directly ask them why that option don't affect the PayPal payment page, and if it's coming from an option that you have set through your Paypal account configuration page.