diff --git a/lib/mustache/readme_moodle.txt b/lib/mustache/readme_moodle.txt
index fc614724699..75b29f4ae75 100644
--- a/lib/mustache/readme_moodle.txt
+++ b/lib/mustache/readme_moodle.txt
@@ -20,3 +20,6 @@ from the list. If still not available upstream, they will need to be re-applied.
 
 - MDL-67114: PHP 7.4 compatibility. Array operations on scalar value.
   This corresponds to upstream https://github.com/bobthecow/mustache.php/pull/352
+- MDL-73586: PHP 8.0 compatibility. Removed 'mbstring.func_overload' init setting.
+  This corresponds to upstream commit https://github.com/bobthecow/mustache.php/commit/e7165a33b282ab4d20b3863825caadb46313d62b
+  that is availbale for the library versions 2.14.1 and up
diff --git a/lib/mustache/src/Mustache/Tokenizer.php b/lib/mustache/src/Mustache/Tokenizer.php
index 6dbe0cdfa03..71871226a34 100644
--- a/lib/mustache/src/Mustache/Tokenizer.php
+++ b/lib/mustache/src/Mustache/Tokenizer.php
@@ -97,11 +97,16 @@ class Mustache_Tokenizer
         // Setting mbstring.func_overload makes things *really* slow.
         // Let's do everyone a favor and scan this string as ASCII instead.
         //
+        // The INI directive was removed in PHP 8.0 so we don't need to check there (and can drop it
+        // when we remove support for older versions of PHP).
+        //
         // @codeCoverageIgnoreStart
         $encoding = null;
-        if (function_exists('mb_internal_encoding') && ini_get('mbstring.func_overload') & 2) {
-            $encoding = mb_internal_encoding();
-            mb_internal_encoding('ASCII');
+        if (version_compare(PHP_VERSION, '8.0.0', '<')) {
+            if (function_exists('mb_internal_encoding') && ini_get('mbstring.func_overload') & 2) {
+                $encoding = mb_internal_encoding();
+                mb_internal_encoding('ASCII');
+            }
         }
         // @codeCoverageIgnoreEnd