In my experience, you have to treat the
VERSION fields of those reports with a large grain of salt. Often the tool is just looking up the port number in a table; indeed
port 23 is listed as the default TELNET port (see wikipedia/List_of_TCP_and_UDP_port_numbers). So your nmap scan means that something is listening on 23, and it may or may not be TELNET.
Nmap supports a mode called "version detection" in which it will actually start the opening handshake of known protocols to try to determine what protocol is listening. This can be very slow, for example if it knows about 100 different protocols and is scanning 1,000 ports, then that's 100*1,000 = 100,000 handshakes to try. So this option is off by default. You can turn it on with
-sV. You can read more in the nmap man page; ctrl+f for "version detection".