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Doing a bit more research on this it appears to be not a new problem, and more likely something to do with Gmail insisting upon OAuth2 authentication for IMAP.
- Adonay Felipe Nogueira repeated this.
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This looks like the same thing, from over a year ago:
"Up until today I have not had any problems accessing my Gmail account with Thunderbird. This morning however access was denied and I was prompted to provide a new password. i tried this but each time a message came back that it was unacceptable. In the end the only solution I found was to go in to my Google account and turn off secure apps or more precisely swich to allow unsecure apps. As soon as I did this I can access my gmail account again OK but it does beg the question why does Google NOW consider the Thunderbird application to be insecure."
https://support.mozilla.org/en-US/questions/1201406