Detection of muon spin relaxation in graphite above room temperature, together with reports of a temperature-dependent muon Knight shift, suggest that the muon state in graphite is not electronically diamagnetic, as previously supposed. The involvement of a molecular radical formed by the chemical reaction and bonding of interstitial muonium is proposed. These considerations should, with due regard for isotope effects, apply similarly to hydrogen and are supported by simulations of hydrogen addition to a graphene fragment. Density functional calculations provide hyperfine parameters as well as a visualization of the singly occupied molecular orbital. This allows interpretation of the data in terms of the temperature-dependent occupancy of this orbital and its rate of exchange with conduction electrons.