Given his devotion, why was Dev unable to recognize Sai Baba when he appeared as a Sanyasi? Was this a failure on Dev's part?

Dev's inability to recognize Baba was a form of delusion, which he himself later regretted as a failure born from the "pride of my knowledge." The narrative in Chapter 40 suggests a couple of reasons for this. Firstly, the Sanyasi had previously approached him for a different purpose—collecting funds for cow protection—which created a mundane context in Dev's mind. Secondly, Dev admitted that he forgot to pay attention to the specific clue Baba had given: "When I come for the meal, two others will come with me." This detail, which Baba fulfilled exactly, was the key he missed. The incident illustrates how even a devotee can be veiled by Maya, or illusion, and fail to see the divine when it appears in an unexpected guise.