Can users withdraw a higher value than what they've initially deposited via the TrueLayer APIs?

Yes, as there is no validation to the source of the money when a payout is done.

Example: 

• User A uses TrueLayer (Open Banking) to top up £50 in their digital wallet.
  Wallet balance is now: £50
  
  
• User A uses a debit card to top up £100 onto their digital wallet.
  Wallet balance is now: £150
  
  
• User A wants to withdraw £150 from their digital wallet.
  

Can they get £150 for the refund using PayDirect, when only £50 of those came from TrueLayer? Yes, as stated above, there's no validation to the source of the money when a payout is done.

More

Read more about PayDirect here.