See https://support.mozilla.org/en-US/kb/microsoft-oauth-authentication-and-thunderbird-202

Thank you for the info on incoming authentication for hotmail.

My outgoing smtp server does not have the oauth tab

Did you change to the office365 server?

I do not have the option of changing the server, and when I did do the oauth it was rejected by MS.

Can you post a screenshot of your SMTP server?

Here are some screen shots

Yes, you do have that option, change it to smtp.office365.com and then see if you have theOauth2 option. For input, if you cannot get Oauth2 to show, try changing incoming server to outlook.office365.com and then try for Oauth2.