User Agent: Mozilla/5.0 (Macintosh; Intel Mac OS X 10.14; rv:79.0) Gecko/20100101 Firefox/79.0

Steps to reproduce:

I have a fully working Exchange Online (Office 365) IMAP account set up with "Normal password" authentication. All folders are set to synchronise messages locally, and this happens within a couple of minutes of starting Thunderbird.
If I switch to OAuth2, automatic synchronisation of folders no longer works. I have to select each folder manually to synchronise new messages.
Furthermore, when setting up an Exchange Online account from scratch with OAuth2, only the INBOX is found. No user-created folders are found until I switch back to "normal password".

Actual results:

Switched a fully-working Exchange Online IMAP account, which could see and synchronise all folders locally, to OAuth2 authentication. New emails are received without any issues but folders are no longer automatically synchronised locally - they have to be specifically selected.
Creating a new Exchange Online account from scratch with OAuth2 results in only the INBOX being found. Switching to Normal Password authentication results in all user-created folders being discovered.

Expected results:

Folder synchronisation should work the same when using OAuth2.

This was with version 78?
Do you still see the problem when using a newer version?

This seems to be a duplicate of bug 1714572, at least the part about Creating a new Exchange Online account from scratch with OAuth2 results in only the INBOX being found. Switching to Normal Password authentication results in all user-created folders being discovered.
Regarding the other issue Switched a fully-working Exchange Online IMAP account, which could see and synchronise all folders locally, to OAuth2 authentication. New emails are received without any issues but folders are no longer automatically synchronised locally - they have to be specifically selected. this may also be related, not sure. Is the reporter setting these non-Inbox folder with property "When getting new messages for this account, always check this folder"? FWIW, this works for me with oauth2 on o365.

However, with my o365 account I can't switch between oauth2 and normal password since only oauth2 works.

Edit: I'm running with a fairly recent trunk version, not 78. But don't know of any changes that would affect this.