Yeah, the listing says Victoria, Australia but the item came from Malaysia
The financial problem with fake locations in a dispute is that the seller may purport to be in Canada but actually be overseas.
That may cost the buyer money in duty and sales taxes when the item enters Canada. and makes return shipping more expensive.
As far as the overseas location is concerned in a return it's moot. Return shipping will be expensive to both Oz and Maylaysia.
But in your case, if the seller does not provide shipping, he loses the Dispute, you toss the mic in the trash*, and get a full refund.
will the money be taken out of the sellers account?
The seller pays the refund. While the Dispute is open the payment is usually frozen.
If the seller does not refund voluntarily, he gets a Defect, eBay refunds the buyer, and eBay goes after the seller for their money. And both eBay and Paypal have the seller's financial information.
But that's not your worry. You will be refunded.
*And you don't have to toss it out, you can use it or donate it, if it is not actually dangerous. Up to you, from a civil law point of view. Selling it as a counterfeit would be criminal of course.