Mhalsapathi, folded hands addressed him as ‘Welcome Sai’

But the young fakir got down slowly from the cart after all others left and started walking with divine light. On seeing the young fakir, Mhalsapathi recognised him as God incarnation. He used to mostly read the poems ( dohe ) of Kabir. In his poems Kabir used to address God as ‘Sai’ . Mhalsapathi, who was the ‘Pujari’ of ‘Khandoba’ temple, on seeing the young fakir, came out of the temple and with folded hands addressed him as ‘Welcome Sai’. In this way, the fakir got the name as ‘Sai’ from Mhalaspathi. Afterwards he became famous as ‘Sai Baba’ . Baba means father.
Baba never disclosed anything about his parents or the details of his birth. He dressed like a Muslim fakir He used to have firewood continuously burning in the Dhuni ( a Hindu custom ) in the mosque. He grew a tulasi (basil) plant in the left front side of the mosque. In this way, he used to follow both Hindu and Muslim customs. He thus drew devotees from both the religions and used to teach them religious tolerance and co-existence.
Having noticed the situation, Baba called Mhalsapathi and asked him to come inside the mosque and do puja as usual: "I will see who will harm you," So saying Baba struck the floor with his sataka . On hearing Baba’s roaring voice, all the Muslims who were near the mosque carrying sticks, ran away in fear. But Mhalsapathi could not get over the fear that gripped him. He began to fear that they might harm him on his way home and told Baba about his fear. Then Baba, pitying him, gave him the following assurance. "Either these persons or any other person, here or elsewhere, either in your present birth or future births, cannot do any harm to you. I will be guarding you with a thousand eyes. I will continue to protect you. You can go home without any fear." Such assurances have not been given by any other god till now.

http://www.saibaba.org/lhossb/lhossb5.html