I googled "Microsoft authenticator on Thunderbird windows needed"

I got the following AI generated information, which appear to be an accurate summery of the situation..

To use Microsoft Authenticator with Thunderbird on Windows, you need to configure your Microsoft account within Thunderbird to use OAuth2 authentication; this essentially allows Thunderbird to interact with your Microsoft account using the Microsoft authentication system, which can then prompt you for verification through the Microsoft Authenticator app on your phone when needed. Key steps to set this up:

Open Thunderbird Account Settings: Go to "Tools" > "Account Settings".

Select Server Settings: In the left pane, choose the relevant Microsoft account and click "Server Settings". Change Authentication Method: Under "Security Settings", select "OAuth2" as the Authentication method. Outgoing Server (SMTP): If necessary, also change the authentication method for your outgoing server (SMTP) to OAuth2.

Important points to remember:

Microsoft Authenticator App: You will need the Microsoft Authenticator app installed on your phone to receive verification codes when prompted.

Administrator Approval: Depending on your organization's setup, you might need administrator approval to use OAuth2 authentication with Thunderbird.

My summation is set you authentication method to oauth in Account settings and see if you still get this error message. I think the authenticator is only required for other authentication methods than oauth. I am certainly not getting such a message on my Hotmail accounts.

I reset authentication method to Oauth2 about a year ago for IMAP and SMTP. This message just started today.