I have created this account just to thanks @griz. You saved my day. My problem was not Drupal but Mautic's symfony mailer DSN.
I did everything in my power. Wasted the whole day and then finally with enough google search I found your comment and removed the spaces between the app password for Gmail and then it worked like a charm.
I previously used App Password with space in different applications and they worked, so never thought of this. However thank you again and again.
And for SEO: Mautic Gmail Google Mailer SMTP error can be fixed if you use App Password and remove spaces between those App Password.
You are welcome!