It looks like the esptool is a compiled version, not the Python one. I did the following:
copy /Users/XXXXX/Library/Arduino15/packages/esp32/hardware/esp32/1.0.4/tools/esptool.py
to /Users/XXXXX/Library/Arduino15/packages/esp32/tools/esptool_py/2.6.1/esptool.py
chmod +x esptool.py
edit the file /Users/XXXXX/Library/Arduino15/packages/esp32/hardware/esp32/1.0.4/platform.txt
and change the following line:
tools.esptool_py.cmd=esptool into:
tools.esptool_py.cmd=esptool.py
save platform.txt, restart ArduinoIDE