You mention you have updated the Authentication Method to use 'OAuth2'. Thunderbird has made alterations so now both POP and IMAP accounts can use OAuth2 for gmail. But did you set up to allow saved cookies ?

• Select 'Menu app icon' > 'Preferences' > 'Privacy & Security ' Under 'Web Content'
• Select 'Accept cookies from sites'

It may also be a good idea to make exception:

• Click on 'Exceptions..' button
• Enter: https://accounts.google.com
• Set to 'Allow'
• click on 'Save Changes'

These are the necessary changes to Account Settings which you may have already done.

• Right click on gmail pop/imap account name in Folder Pane and select 'Settings'

This opens the Account Settings in new tab The pop/imap account name should be selected Look bottom right for Outgoing Server (SMTP)

• Click on 'Edit Server _SMTP' button
• Set Authentication Method : OAuth2
• Click on OK

Now set the incoming authentication:

• select 'Server Settings' for gmail account
• Set Authentication Method : OAuth2

If this still presents a problem:

• Menu app icon > Preferences > Privacy and Security
• Scoll to 'Passwords'
• Click on 'Saved Passwords'

You say the Oauth token has not been stored, but do you still have the original passwords stored? If yes, remove them.

• Select the mailbox/imap line for that email address/user name and click on 'Remove'
• Select the smtp line for that email address/user name and click on 'Remove'
• Exit Thunderbird and wait a few moments for background processes to complete Start Thunderbird

If attempts for some reason keeps looking for wrong 'localhost': It means you are probably running a local server eg: Apache Switch off Apache or whatever local server you are using. Note some linux systems may have this auto installed. Then try again.

If still a problem: Do the following:

Let's see if this is due to something corrupted in session, password files etc.

• Menu app icon > More Troubleshooting Information
• Under 'Application Basics' - Profile Folder - click on 'Open Folder'
• This opens a new window showing the contents of your current in use profile name folder.

• Exit Thunderbird now - this is important.

Look for the following files and delete them.

• cert8.db - obselete file
• key3.db - obselete file
• pkcs11.txt (This should exist but some people find it is missing)
• secmod.db - obselete file
• session.json
• xulstore.json

NOTE: Do NOT delete:

• key4.db
• cert9.db
• logins.json

Start Thunderbird New pkcs11.txt, session.json, xulstore.json files will get created. Enter password at prompt.