Did Sai Baba truly die, and how should devotees understand his passing?

The concept of death, as commonly understood, does not apply to Sai Samarth. Chapter 43 explains that for enlightened beings who incarnate by their own will, birth and death are mere false imaginations. Sai Baba, being the complete Supreme Brahman, is described as being devoid of bodily impulses, making the notions of birth or death irrelevant to him. His departure from the physical body was a voluntary act, where he burned the body in the fire of Yoga and merged himself into the unmanifest. He now resides in the hearts of his devotees, so to say he 'perished' is a misunderstanding. He simply returned to his previous unmanifest state, remaining eternally present.