Ask HN: Cannot connect to Exchange account via IMAP in Thunderbird

I just signed up for a Microsoft 365 Business Basic plan for my family. The setup has been going great, except my parents use Thunderbird (Windows in their case, but I have confirmed this same problem happens when I try my account in macOS). I have been able to connect to our accounts via Exchange connectors, but when I try to connect via IMAP in Thunderbird, I get a generic "Login to account 'me@mydomain.org' failed." I tried turning on MFA so that I could generate app passwords, but those don't work either. (Also confirmed that IMAP is enabled for all existing accounts.)

I am also the admin of a Microsoft 365 Business Premium domain, and I don't have any problem creating app passwords for those accounts, and then successfully creating IMAP-connected accounts in Thunderbird. So is this a limitation of the Business Basic plan? Something that is turned on by default in Premium but not Basic? Thanks for any pointers.