Create the user (once): in WordPress Users → Add New User, with Role: Editor (not Author or Subscriber, otherwise the test fails). It will be the author of the articles: pick a suitable name (e.g. «Editorial team»).
Open that user: Users → All Users → Edit under its name. Note the Username at the top (not the display name, e.g. «John Smith»): it goes in the «WordPress user» field. Its email works too.
Scroll to the bottom to Application Passwords. In «New Application Password Name» type just a label, e.g. «Active SEO»: it is not the password and does not go here.
Press Add New Application Password. WordPress shows a generated password (usually 24 characters in groups of 4, e.g. abcd efgh ijkl mnop qrst uvwx; some security plugins generate shorter ones).
Copy that generated password and paste it in this field, spaces included. It is shown only once: if you lost it, revoke it and create another.
Press Save and then Test connection.

It is not the WordPress login password. The site must use HTTPS and the Active SEO Connector plugin must be active.

If the test says the credentials are rejected: check that username and password belong to the same user; if the site has a captcha or a security plugin (Wordfence, Solid Security, All-In-One WP Security…), exclude REST API / Application Passwords from it or make sure «Disable application passwords» is off. A custom login URL (e.g. /my-login) is not a problem.