I seem to have the same issue
I’m using the latest Woocommerce version 2.6.14. Paypal Standard payments complete as usual. However, the inventory is not reduced when the order changes from Pending Payment to Processing. Using Cash on Delivery works as expected with inventory being reduced. I’ve set the Instant Payment Notification (IPN) to: https://[mydomain].com/?wc-api=WC_Gateway_Paypal and this had not altered the situation.
Any ideas as to what may be causing this?