I searched all over the internet but didn't find a formal proof for this paradox, so here is my attempt:
$\exists x[P(x)\implies \forall yP(y)]$
Let $x=x_0$. Thus $P(x_0)$ is given.
Let $y$ be arbitrary. So we have to prove $P(y)$.
$y$ being arbitarary means that either $y=x_0$ or $y\ne x_0$.
So now we prove $P(x_0) \lor P(z)$ where $z$ is arbitrary and $z\ne x_0$.
$P(x_0)$ is given. So the paradox is true. $\square$
Is this correct ? If not what is wrong ?
Your proof is bad. You don't have $P(x_0)$ is given. You have to show that such $x_0$ exists.
The point is that if there $x_0$ such that $\lnot P(x_0)$, then $P(x_0)\rightarrow\forall yP(y)$ is vacuously true; otherwise for all $x$ it is true that $P(x)$ and therefore $\forall yP(y)$ is true, and the implication is again true, in which case any choice of $x$ will prove the statement.
One key point is that the proof doesn't constructively show which of the option holds, is it the case that $\forall yP(y)$ is true, or perhaps there exists some $x$ such that $\lnot P(x)$?