The Server Name needs to be outlook.office365.com. Everything else looks fine.

You haven't shown them but the 'Outgoing Server (SMTP)' settings should be:—

 Server Name: smtp.office365.com
 Port: 587
 Connection security: STARTTLS
 Authentication method:  OAuth2
 User Name: <your e-mail address>

Thanks a million, ThePillenwerfer!

That seems to have worked for downloading mail from one of my hotmail.accounts set to OAuth2 in Thunderbird.

As for the outgoing server, I use a mix of gmail and hotmail accounts, but my understanding is that I can set only a single outgoing server for all of my different email accounts. Is that right?

I currently have the outgoing server set to smtp.gmail.com which seems to work fine for sending messages from my hotmail accounts as well as my gmail accounts. Do you think that there's any reason I should change it to smtp.office365.com? (You know that old saw: "If it works; don't fix it."

Will in Seattle a.k.a. "Clueless"

Good question as I too am of the "If it ain't broke..." school.

If you haven't got the old MicroSoft SMPT server set-up I can't see any point adding the new one. If you make a note of how you can always add it if there are problems down the line.

If your Hotmail account is sending on the gmail smtp, and the account hasn't been added as a sender in gmail webmail settings, recipients will see your message as having been sent from the gmail account, and replies will go to that account. It's better to have each account send on an smtp with the same provider and with the same User Name:

https://support.mozilla.org/en-US/questions/1438310