You can have multiple Mail addresses, that can be used as your Apple ID for Apple Services.
The mail address of your 3rd party mail account, for example, can also be your main Apple ID, besides the ...@ iCloud.com Mail address, given to you by Apple.
And in that case, your Apple ID password will be the same for both mail addresses, but only when using Apple Services, like iCloud, iCloud Mail, iTunes Store, AppStore, iMessage, FaceTime, etc.
As bigpond seems to be your 3rd party mail provider, the password for that account can be a different one, if you log in via Webmail on your browser or access the bigpond Mail server via Apple Mail.
Which would then require the app specific password, and not your Apple ID password, which should only be used for Apple Services.
About your Apple ID email addresses - Apple Support
Learn how passwords are used on Mac - Apple Support
In my case, my primary email address for my Apple account is a 3rd party mail address.
In order to be able to receive and send mail, using Apple Mail on my macOS and iOS devices, I had to set up an app specific password for Apple Mail in the mail account settings for my 3rd party provider.
After that I could use this password in the settings for Apple Mail as the password to access the 3rd party mail server.
Assuming my Apple ID is abc@xyz.com and the Apple ID password 12345.
Apple Mail can not log into my 3rd party mail server, using abc@xyz.com and the 12345 password, if my 3rd party mail provider password is 67890.
Only abc@xyz.com and 67890 will allow Apple Mail to access the 3rd party mail server.