Change the authentication to OAuth2, for the outgoing and incoming servers, check that cookies are allowed in TB Options/Privacy & Security, and in the same section, remove the passwords for the gmail account in Saved Passwords, restart TB, enter the account password in the OAuth browser window when prompted.

Authentication was at OAuth2. So I left it alone. Cookies were allowed. I deleted all passwords. Restarted Thunderbird & OAuth browser did not appear. Instead the google app opened, and I typed in my old password. then I went back to TB options/privacy & a new very long encrypted password appeared. However, TB will still not allow me to send messages. What now?

P.S. Before asking for help, I removed 2-step authorization, which didn't seem to do anything noticeable.

Your picture shows 'normal password' authentication for the outgoing. If you have OAuth2 for both incoming and outgoing, they will use the same oauth token. I think what you're calling the 'google app' is the OAuth browser window that asks for the account password and authorization for TB to access the mail.

If you did all that and still can't send, check if an antivirus is blocking outgoing mail. Avast/AVG, Bitdefender, ESET are common sources of problems.

Thanks!!! The Trend Micro software was blocking it. Their support had to create an exception. TB couldn't do it.