Before enabling two factor authentication, make sure that the SMTP settings are correctly configured. For more information, refer to Notifications - SMTP Settings in Administration section.
To enable Two Factor Authentication

Log out and Login back to NSM using Username, Password, E-MAIL as TFA Method, and Code sent to the email id.
Now, two factor authentication is enabled for the user. Every time, user needs to authenticate with an OTP sent on email configured in System | Settings > Administration > Notifications page or use Microsoft/Google Authenticator app (if Authenticator App is configured) to login to the account.