If the password was correct, it wouldn't be rejected. This may help: Verizon and AOL require an APP password when using email clients on a PC. I believe you must go to the AOL site and select the security page and can set up the APP password there. See this page for more info: https://help.aol.com/articles/Create-and-manage-app-password

What is the authentication method for the incoming and outgoing servers? It should be OAuth2, and the account password should be entered when the OAuth browser-like window asks for access.