This is a common misunderstanding of the text. According to the source material from Chapter 36, the description of Sai Baba is quite the opposite. The chapter explicitly states that he is a swan in the lake of the Supreme and that 'he is indifferent to the "I am He" (So-ham) attitude'. This indicates a state of being beyond ego and self-identification, not an embrace of it. The narration emphasizes his detachment, noting that he stays 'distant and detached from his name' while causing events to occur, which is a sign of humility and spiritual transcendence, not arrogance, as detailed in Chapter 36.
The text mentions Sai Baba had a 'So-ham' or 'I am He' attitude. Isn't that an arrogant belief for a saint?
π Chapter 36