I have upgraded to 1.2.1 and it does not resolve the issues for me. I do not use any caching solutions or CDN services. I have cleared all cookies for my site, restarted the web server, etc.
The behavior is the same as with version 1.2:
During the PayPal Express checkout process when the user does not provide any shipping address before going to PayPal (“skip the forms”), the shipping method choice is never presented to the customer when he is redirected back to the order review screen. They can place the order without paying for shipping.
If the customer does not skip the forms and fills in shipping address on my site before proceeding to PayPal, the shipping amount is charged but the shipping line item is not included in the order and the shipping address does not appear in customer emails.
I use a 3rd party shipping module, Mangohour Table Rate Plus. I do not use any built-in Woocommerce shipping solution and have not defined any shipping zones that were introduced in Woocommerce 2.6.
I would gladly stay downgraded at version 1.1.9.2, but the credit card expiration date validation problem is in that version and would prevent me from taking credit cards on my site.
Please keep looking into this problem so I can use PayPal Express again.