I'm setting the 'Default launch container' of an external tool to 'New window'.
Browsers block a popup that is not a result of a user action (button click).

When a user clicks on LTI activity link, Moodle navigates to the LTI form page and tries to submit it to a new window.

Instead, Moodle should open a new window when a user click on the activity link (result of a user action) and in the new window submit the LTI form.