Are you using a secure mail key in TB in place of the account password?

https://www.att.com/support/article/dsl-high-speed/KM1010523/

I always use a password, which gets entered automatically when I log in. I should point out that this failed login problem is intermittent and ongoing. Sometimes I can login, other times I have to wait several hours. But when the Thunderbird login fails, I can use Mail, and that app works fine.

The point is, AT&T requires secure mail keys for desktop mail apps. The regular account password might work for webmail or phone mail apps, but not apps like TB (the Windows or OS X Mail clients are similar to mobile mail apps).

Remove the account's entries from Settings, Saved Passwords, restart TB, enter the secure mail key when asked for a password.