STEALTH APPROACH:If you are going for the stealth achievement, you have to choke Paolo out or sleep dart him the first 2 times. The third time above the bar you have to kill him and can reload.
Thanks to
BLOOD BERSEKER for the info
MISSION 4: THE CLOCKWORK MANSIONBefore you take the cablecar to the Clockwork Mansion go under the tracks and into the opposite street from where you started to find the black market downstairs. Talk to the shopkeeper and she will tell you that Paolo will arrive soon. After you take him down he will disappear.
MISSION 6: DUST DISTRICTThe second and third time you get to face Paolo is in the Saloon of Dust District. When you enter the saloon he will be sitting in front of the musicians. Take him out and he will disappear again. Walk upstairs and take care of him one last time.