It don’t think air that was the medium which caused the Cerenkov radiation. Remember, gamma rays are photons, and they are being emitted from inside the fissile material, before they reach the air outside. It was probably within the medium of the fissile material itself that the Cerenkov radiation was generated.
Cherenkov radiation is produced only by charged particles (not neutrons, or gamma radiation) travelling in a medium at a higher phase velocity than light in that medium. If generated within the fissile material itself - which was opaque - the Cherenkov radiation wouldn't be visible.
I don't believe that Beta particles would fill the bill as a possible source, either. They are not very penetrating, and their velocity is considerably lower than that of light.
Regards,
Cherenkov radiation is typically seen in water. The interocular fluid being mostly water may have been the location of the blue flash.