Why were people unsure if Baba was truly dead after he stopped breathing? Was there a history of this?

Yes, there was significant doubt among his followers as to whether Baba's passing was a final death or a state of Samadhi (trance), and this was because of a past event. Chapter 44 explains that 32 years prior, Baba had a similar experience where he drew his life force into the crown of his head for three days. Everyone thought he had died, but he suddenly returned to his body, dispelling their anxiety. Because of this precedent, when his breath ceased for the final time, people were understandably doubtful and deliberated for twenty-six hours about whether he might rise again.