With Braintree sandbox account, PayPal is enabled by default. With use of dropin js and sandbox API keys, payment form looks like this for me in sandbox account.
I am using following code as given in braintree documentation,
<script>
braintree.setup(
// Replace this with a client token from your server
"{{$clientToken}}",
'dropin', {
container: 'dropin'
});
</script>
But when I use Production API keys, the PayPal option is not visible anymore. I only see credit card form. I have linked PayPal merchant account to Braintree and PayPal seems to be enabled.