when prompted for password, enter the app password. Do NOT enter the app password when doing initial setup - only when prompted after defining the account.

What is meant by "defining the account"? I have had this THunderbird account for decades and never had to enter a password.

Is this advice from an archived post correct?

Using the menu bar, click Tools: Options: Security section: Passwords tab Using the "three bar" menu button on the top right, click Options: Options: Security section: Passwords tab

You will see the same as my first screenshot below.

Click the Saved Passwords button, and you will see a list of your passwords. There will be two entries for your e-mail address. One for incoming e-mail, the other for outgoing e-mail. Delete them both.

Then when you check for e-mail, Thunderbird will ask you for your password (second screenshot below).

Enter your password and make sure that you select "Use Password Manager to remember this password", before you click OK.

It will ask this again the first time you send an e-mail from the account also.

Yes, that is still current. On your original question, Thunderbird doesn't know app passwords from other passwords; they're all the same to Thunderbird. It is the email provider that validates them.