There is surprisingly little published information on the formation of zinc sulfide and its potential to form zinc soaps which is the primary concern with zinc oxide (zinc white) but our scientists on the moderating board may have additional insight on this topic that I am unaware of.
I will include some excerpts by an article that was only recently published by Rebecca Capua in 2014 (in the Journal of the American Institute for Conservation) who writes both about the history of zinc sulfide (specifically lithopone) as a pigment but also includes scientific and anecdotal history as well:
Lithopone had high marks in all categories, with one huge disadvantage. As lyrically described by Orr's Zinc White 25th anniversary brochure in 1923:
“[T]he good gifts of the fairy godmother are often accompanied in the world of fact as in that of fiction by a malevolent touch of a malicious witch. The new pigment, with all its claims to favour, had disadvantages, the greatest of which was the property of darkening in the direct rays of the sun. The cause was a mystery, never satisfactorily explained, the apparently paradoxical effect being that the trouble was reversible, for, while the paint went dark in the sun's rays, it reverted to white in the darkness (Robbins, A. 1923. Orr's Zinc White: A Romance of Modern Industry.http://www.catalyst.org.uk/collection/collection.htm.”
The source of the problem, described by Rigg (Rigg, J. G. 1956. The history, manufacture and uses of lithopone. Journal of the Oil and Colour Chemists’ Association 39:809–831.), was that alkali metal chloride impurities found in some zinc sources would tend to catalyze the transition from the blende or sphalerite crystalline form of zinc sulfide to wurtzite during calcination, and wurtzite is more readily reduced in the presence of ultraviolet (UV) radiation to produce metallic zinc. In later formulations small quantities of cobalt salts were added prior to calcination, which had the effect of stabilizing the wurtzite crystal lattice and thus increasing the light-fastness of the lithopone (Rigg, J. G. 1956. The history, manufacture and uses of lithopone. Journal of the Oil and Colour Chemists’ Association39:809–831.). According to Rigg, Orr's Zinc white was prepared from materials free of alkali metal chlorides.
The difficulties that the pigment industry had in producing a light-stable version of lithopone led to a far-wider adoption within manufacturing industries compared to its use in artists’ oil and watercolor paints. Lithopone was extremely important to the rubber, linoleum, and interior house-paint industries (Robbins, A. 1923. Orr's Zinc White: A Romance of Modern Industry.http://www.catalyst.org.uk/collection/collection.htm. Perhaps because of the stigma of its early difficulties, the usage of lithopone in paints for fine arts is difficult to uncover.
As to the suggestion that lithopone used as an artists’ watercolor pigment did not actually discolor: it seems likely that protection from sun exposure during painting would have averted the reduction reaction. Many scientific accounts, such as those of O'Brien, point to experimental results that reveal that “moisture is necessary for the darkening” (O'Brien, W.J. A study of lithopone. The Journal of Physical Chemistry 29:113–144., 126), and that the same results would occur whether the lithopone was mixed with water, linseed oil, or varnish. It is reasonable to conclude that the La Farge and Van Gogh watercolors were painted indoors or otherwise protected from sun exposure, and once dried were not vulnerable to reduction to the same extent. It is hard to believe that artists’ paintings with lithopone did not experience any darkening given the contemporary scientific evidence, but they were certainly less vulnerable than a white-washed fence or carriage exposed to the elements, circumstances that seem particularly worried-over by industrial chemists grappling with this problem. However, the question then arises: if lithopone used as an artists’ pigment was not particularly prone to darkening, why did it have a poor reputation as an artists’ pigment? Indeed, the problem is circular; the best-case scenario is that this study leads to increased attention to the identification of lithopone on works of art. Only with more data points to provide a statistically meaningful set for comparison can research go beyond hypothesizing the answers to these questions.