I was having similar issues with email settings. I just figured out what my problem was.
Here are my settings
email method: SMTP
SMTP host: smtp.gmail.com:587
smtp username: tomhklab@gmail.com
SMTP encryption: TLS
I don't know if this help, but after I set change the security setting on my Google Account, I got a security notification asking whether my limesurvey website is a safe source. I select yes, then try to create another user in limesurvey and it worked.
That is exactly what the problem was.
1) Go to your google account (web browser)
2) Click Security
3) Scroll down to Less Secure App Access
4) Click on Turn On
5) Click the switch to turn it on
You will get an email notification of this change. As long as your settings are like below, this worked for me.
I also turned on SMTP Debug Mode: On errors in my Lime Survey global email settings, so that told me if I had a userid/password problem or if it was an SMTP connection problem. When I saw it was the later, I found your solution. Thanks!