Sorry but this is a recurring issue with whatever form of authentication TT use for their mail servers.
It has nothing to do with the mail client, password length or complexity.
During yesterday's recurrence it affected three of my PCs, two using Outlook v2101 (Build 13628.20448) otherwise known as Outlook for Microsoft 365 MSO (16.0.13628.20318) which is fully up to date. The third running Thunderbird 78.7.1.
All three running Windows 10, 64 bit version 20H2 (OS Build 19042.804).
It ALSO affected BlueMail on my Android phone.
All four devices use IMAP (for TT). I gave up using Outlook for Android as that is nothing but a mass of bugs held together with strands of working code. Whenever Outlook for Android hits this TT authentication issue the ONLY way to recover it, assuming the TT issue has "gone away" (I use that phrase quite deliberately as "fixed" doesn't apply), is to delete the TT IMAP account from Outlook for Android and re-add it. A real PITA.
So no, yet again this was a TT authentication issue. The very same issue which has been recurring with depressing regularity for years and never gets fixed properly.