Here is a nice orbital plot of the "temporary capture" of that old S-IVB:

http://neo.jpl.nasa.gov/j002e3/j002e3c.gif Warning: 2.1MB image

This the motion of the object relative to the earth-moon system. Note that it came in near the L1 point, circled around several times then went back out. This motion is entirely in agreement with laws of physics that apply to orbital mechanics.

Yes, something can "circle" both the earth and moon, but the orbits are very complex, not the simple modified 1-body problems of elementary mechanics.

-Richard