The moondust, upon entry into a near pure oxygen environment in the LEM,
began to slowly oxidize [burn]...
Thus the scent resembling burnt gunpowder.

Yes! Lunar dust is composed of oxides, but not all of the oxides were
a perfect combination of oxygen atoms and metal ions, due to previous subjection to ionizing solar ultraviolet light for
who knows how many years, centuries, etc.

There's a practical consideration here!...It might be easier to extract oxygen from lunar soil than
previously thought; solar UV radiation could help with the extraction process. Astronauts would still need
to apply electric current and heat to the soil to complete the extraction process.