I installed Gibbon on a test server to try and troubleshoot this. Their documentation could maybe be slightly improved by mentioning the following:
As it's using 'internal' for password management, you must provide a populated email address field in Gibbon and you must enable the \auth_db\task\sync_users scheduled task in Moodle. Moodle will then sync users and send an email to new users with a temporary password.
The Gibbon docs do say that it needs cron to run - but the scheduled task for external database is disabled by default! Go to /admin/tool/task/scheduledtasks.php and change the "Synchronise users task" to run every minute, and hey presto, your users appear in Moodle and a temporary password is issued by email.
As it's using 'internal' for password management, you must provide a populated email address field in Gibbon and you must enable the \auth_db\task\sync_users scheduled task in Moodle. Moodle will then sync users and send an email to new users with a temporary password.
The Gibbon docs do say that it needs cron to run - but the scheduled task for external database is disabled by default! Go to /admin/tool/task/scheduledtasks.php and change the "Synchronise users task" to run every minute, and hey presto, your users appear in Moodle and a temporary password is issued by email.
I added more users to Gibbon and they were synced into Moodle in line with the cron timing (in my case, within a minute) but the emails took about 3 minutes on average.
In addition, you must enable the "Synchronise external database enrolments task" which is also disabled by default.