The error could refer to any incorrect setting for the account, including the password, User Name or authentication type. The AOL settings are:

incoming IMAP server imap.aol.com on port 993, SSL/TLS security, authentication = normal password, User Name = email address.

outgoing SMTP server smtp.aol.com on port 465, SSL/TLS security, authentication = normal password, User Name = email address.

You could also use OAuth2 authentication, which avoids issues with app passwords, less-secure apps and two-step verification or two-factor authentication.

My AOL settings are:

incoming IMAP server imap.aol.com on port 993, SSL/TLS security, authentication = OAuth2 , User Name = email address.

outgoing SMTP server smtp.aol.com on port 465, SSL/TLS security, authentication = OAuth2 , User Name = email address.

Would it help changing OAuth2 to normal password?

I have 9 aol accounts and serveral other accounts. aol uses OAuth2, those other use normal passwords.

As long as the OAuth process has completed and the 'token' has been stored on the computer, in Options/Security/Passwords, I don't see any reason to switch to normal password. But, 'whatever works'.

I wonder if there are any external apps affecting the process, such as security programs scanning secure (SSL) connections, or a VPN. Starting Windows in safe mode is a good way to test if some startup program is affecting TB.