It's probably just your gecko being goofy haha! I don't have any experience with paper towel shredding myself, but as I've browsed the forums, I've found plenty of examples of geckos that munch on stuff they're not supposed to, so I'd say based on that it isn't unheard of. It may not be exactly safe, though, depending on whether it's actually ingesting the paper towel or not. Are you using paper towel as the staple substrate? If the gecko likes eating it, you might consider changing to another gecko-safe substrate like tile or repticarpet, just to avoid digestion problems.
   Happy to hear yours is up and around! I've had mine for two weeks and he still won't come out except when he's hungry. Little turd-blossom 
