Yes, you can use the TubeBuddy Thumbnail generator to create your Thumbnail for your videos as it's easier and quite instant. There are indeed other platforms as mentioned above which are Canva, and Photoshop and at some point, I have even used PowerPoint to create my thumbnails, so yes, there are many other platforms as it depends on which software you're more comfortable with. Canva is quite easy and the learning curve isn't that steep as compared to Photoshop.
You can check out more about the TubeBuddy Thumbnail generator by watching the below video:-
You CAN make a thumbnail with the TubeBuddy thumbnail generator. I think it changes what you can use depending on the level of TubeBuddy you have. I personally have found it useful to use Canva (which is free). That lets you be super creative with your thumbnail and have power over everything you want. (You can pay for Canva too to unlock new features, but the free version works great). I haven't used the thumbnail generator that TB has very much, so someone else might disagree with me lol!
The TB thumbnail generator works best when you are trying to pick out a specific frame as the basis of your thumbnail. I think it has great thumbnail-friendly fonts and effects. It allows for the free use of emoji's also. The TB thumbnail generator is what I started out with (and still use once in a great while). But I do prefer Canva for its ease of use and its friendly features.