I’m having the exact same problem. Happens all the time in the exact same sequence.
I ran all of the following tests:
WP Mail SMTP Email Test: OK
TNP System Delivery Diagnostic: OK
TNP Activation Send a test: OK
TNP New subscriber activation: Fails – SMTP Error Could not authenticate
TNP “Resend activation” button for that subscriber: OK
Really hope you have a solution. I really don’t know what to do next 🙁