By opening the dispute to get the refund, the seller has been given an automatic defect. Once he gets enough of those, he will lose his selling rights. Depending on the amount of feedback he has, depends on how many defects he needs for that to happen.

I don't know why a seller would jack up like that and tell you to open a dispute. That's just crazy! Most (established) sellers know that a dispute means defect, so you do whatever you can for the buyer to stop them opening a dispute and/or leaving bad feedback (which also gives you a defect).