When the New Connection tab is open, I can fill in all information, including the Password.
If I go and Manage Favorites to create a new connection, and click New Favorite, the password field is greyed out.

on purpose?

Thanks!

Go to Tools -> Options -> Favorites. Check to see if "Allow passwords to be saved" is checked. RD Tabs is "secure by default" much like most modern software. Since storing a password (even encrypted) on disk to potentially dozens or hundreds of mission critical computers in a domain is less secure than not storing a password, RD Tabs defaults to refusing to store the password until told otherwise. 🙂 This protects a hapless admin from accidentally violating potential regulatory and/or acceptible usage policies where saving passwords to disk is considered a Bad Thing (TM).

Additional note: If you save a favorite from an established connection (as opposed to editing it manually like you were doing), the password will also not be retained unless that checkbox is selected. The same goes for batch favorite editing. This is all by design.