The problem is that the dialog in your first picture doesn't show the checkbox to have the setting stored in Files & Attachments, probably because the attachment is encoded as application/octet-stream. Try this: create a new file with your text editor and save it as sample.log with Save as type: All Files *.*, then send it to yourself as an attachment. When you open the attachment, you should see the dialog in the attached picture. Click the Open with drop-down to select the helper app (if it isn't the default), and check the 'Do this automatically...' box. Then see if log files you receive as attachments open automatically in your chosen app.

To make text attachments display inline, toggle mail.inline_attachments.text to true in Settings/General, Config. editor.

Thanks for your reply. When I do as you say, the *.log file that I created opened automatically when I clicked it. So there was no dialog box for me to try the rest.

Update: The problem was with how the file was encoded by the sender. Thunderbird properly interprets the file as a text file when this was solved. However it would have been nice if Thunderbird would have given me the ability to assign an app to that file extension.

There is an add-on for 115:

https://addons.thunderbird.net/en-US/thunderbird/addon/openattachmentbyextension/

See also http://kb.mozillazine.org/Actions_for_attachment_file_types#application/octet-stream

Thanks. openattachmentbyextension appears to be incompatible with version 118. But after understanding the risks, I don't think I want to use it anyway. I've solved the problem with the sender.