This isn't inherent in the definition of legal tender, for example large denomination paper notes (100/200/500 euro) are often rejected for fraud risk despite being legal tender, and the latter two ceased printing because legal vendors so rarely accepted them meant that illegal activity was a high proportion of their use.
The keyword is “debt repayment”. You don’t owe a vendor money until you purchase a product. They are fully within their rights to refuse to sell you a product for any reason, including how you wish to pay for it. On the other hand, a bank cannot refuse a loan repayment because it is made in 500 euro bills.
