Hello IPS,
I test with changes of 4.7.12 BETA 3 and still getting the error for many customers who were able to process their payments normally before upgrade of PayPal API. I understand the error means that this is PayPal who declined to process the payment but on basis on what? It has not been redirected to PayPal yet, just clicked to pay (and now the redirection should occur). That may mean PayPal did not like some data you sent within pre-request? Are you sure all fields are processed correctly? I have read that v2 API is crazy if something is missing, e.g. city.
Apart of that, the error is logged as happened to GUEST instead logged in member (I tested myself from customer's account). Please check the issue with some higher priority, as since you started moving to v2 API my customers are having many problems in paying what potentially (and technically too) generates loss.