Hi, Richmond TWp Road Dept
Your screenshots show that OAuth2 and port 587 are set up correctly, and Thunderbird already has permission to send. So the problem is likely an old saved sign-in, or SMTP being blocked on Microsoft's side for this mailbox.
Here are some suggestions you can try:
Check the exact error first. Try to send an email. When it fails, press Ctrl + Shift + J in Thunderbird to open the Error Console. If you see"535 Authentication unsuccessful, SmtpClientAuthentication is disabled for the Mailbox", the block is on Microsoft's side and no Thunderbird setting will fix it. This happens a lot with newly created Outlook.com/Hotmail accounts. It sometimes starts working on its own after a few days. If it doesn't, contact Outlook support and ask them to enable SMTP AUTH for your mailbox.
Clear the old sign-in. Your screenshot lists Thunderbird twice, which suggests an old sign-in may still be saved.
Go to https://account.live.com/consent/Manage, select Thunderbird and choose Remove these permissions.
In Thunderbird, open ≡ > Settings > Privacy & Security > Saved Passwords. Remove every entry starting with oauth:// for your Outlook address.
Under Cookies, make sure Thunderbird accepts cookies from websites.
Close Thunderbird completely, reopen it and send a test email. Sign in again when Microsoft asks.
Check the user name and webmail. In Outgoing Server (SMTP) > Edit, the User Name box should contain your full email address. Also send one test email from outlook.com in your browser. If it asks you to verify your account, finish that step, because unverified accounts can't send from mail apps.
Let me know what the Error Console shows and we can go from there.