What is the proper way to embed the HTML of an external form such as payflowlink from paypal?

The code you use is incomplete, but otherwise I’m not sure what you mean by WP “curtailing.”

Assuming you (or someone) with admin or editor permissions is able to use the post editor, you should be able to add “unfiltered html” via the Text screen. If you (or someone) needs to enable users with lower permissions to do so, you would need to override.