Allegory - The Holy Eucharistic bread and wine is the actual blood and body of the sinless Christ which Christians consume. The Saracen saw the vision of the bread and wine transformed to the body and blood of Christ which being sinless was processed in the Muslim's mind as being like a baby. In other words even though the man was a Muslim it seems he was a righteous man and saw the Holy Eucharistic miracle before his eyes but not being a Christian could not process and comprehend what he saw.
The part of the vision that doesn't fit the gospel accounts is the part about the priest slaying the infant. Christ gives his body "which has been broken" -- past tense -- for us. I couldn't possibly buy Christian doctrine if I had to believe a priest was killing Christ on my behalf.