Sulfur on the Moon's surface may have come from volcanic activity, and it was found in Apollo rock samples in 2020 a few years before Chandrayaan-3 arrived.
While most of this volcanic activity took place 3 billion or more years ago, it may have continued at a low level into recent times. From Wikipedia:
In 2014, NASA announced "widespread evidence of young lunar volcanism" at 70 irregular mare patches identified by the Lunar Reconnaissance Orbiter, some less than 50 million years old. This raises the possibility of a much warmer lunar mantle than previously estimated, at least on the near side where the deep crust is substantially warmer because of the greater concentration of radioactive elements.[1][2][3][4] Just prior to this, evidence has been presented for 2–10 million years younger basaltic volcanism inside the crater Lowell,[5][6] located in the transition zone between the near and far sides of the Moon.
Volcanic sulfur would be expected to exist in a reduced state in magmas, as is evident from the sulfurous materials on the surface of Io (where atmospheric oxygen can't oxidize it as occurs on Earth). In the case of the Moon, even before the Chandrayaan-3 findings reduced sulfur was identified in the solidified basalt of Apollo 11 and Apollo 16 samples[7]. The most common metals in mafic rock (iron, calcium, magnesium) are good sulfide formers, so sulfur could naturally be expected in basaltic rock. Significant concentrations of lunar basaltic sulfur are found in apatite grains where, unlike on Earth, the sulfur is in the form of sulfide instead of sulfate.
References
Jason Major (14 October 2014). "Volcanoes Erupted 'Recently' on the Moon". Discovery News. Archived from the original on 16 October 2014.
"NASA Mission Finds Widespread Evidence of Young Lunar Volcanism". NASA. 12 October 2014. Archived from the original on 3 January 2015.
Eric Hand (12 October 2014). "Recent volcanic eruptions on the moon". Science. Archived from the original on 14 October 2014.
Braden, S.E.; Stopar, J.D.; Robinson, M.S.; Lawrence, S.J.; van der Bogert, C.H.; Hiesinger, H. (2014). "Evidence for basaltic volcanism on the Moon within the past 100 million years". Nature Geoscience. 7 (11): 787–791. Bibcode:2014NatGe...7..787B. doi:10.1038/ngeo2252.
Srivastava, N.; Gupta, R.P. (2013). "Young viscous flows in the Lowell crater of Orientale basin, Moon: Impact melts or volcanic eruptions?". Planetary and Space Science. 87: 37–45. Bibcode:2013P&SS...87...37S. doi:10.1016/j.pss.2013.09.001.
Gupta, R.P.; Srivastava, N.; Tiwari, R.K. (2014). "Evidences of relatively new volcanic flows on the Moon". Current Science. 107 (3): 454–460.
Maryjo Brounce, Jeremy W. Boyce, Jessica Barnes, and Francis McCubbin (2020). "Sulfur in the Apollo Lunar Basalts and Implications for Future Samole-Return Missions", Elements 16 (5), 361-2.