Yes, I'm afraid it looks like a fungal infection.
The soil you have there looks too red and loamy, too thick. That helps fungi to find a good micro-climate. And the little shoot looks clean, but it's probably too small to root by itself.
The dark edges in the leaves are normal in salvia plants growing in not very humid environments.
My two cents on how I would proceed, and try to salvage as much as possible. It might be difficult, but won't hurt to try.
- Get some fresh spongy compost mix, some perlite and a good fungicide that can be dilluted in water, like Daconil or Neem Oil.
- Prepare a dillution of fungicide in sterile (bottled) water in the right proportions, and have a glass cup with around 200ml of that solution ready. Add to the cup a few drops of peroxide.
- Take a cutting of the top of the plant with a disinfected razor blade, an inch below the lowest pair of big leaves.
- Remove those two last leaves, and I'd suggest to cut half of the other large leaves on top as well, leaving the new pair on top intact. You are trying to heal and root this cutting, and reducing the amount of leaves decreases loss of water by transpiration, until the cutting develops new roots. The leaves you removed (or at least the clean, un-spotted parts of them) can be kept and dried for consumption if you want, but I would only keep the clean bits, if any.
- Place the cutting immediately inside of the water cup. Mist thoroughly the cutting with more of the fungicide solution.
- After a couple hours or so, once the leaves have dried a little, cover the cup and cutting with a transparent bag, let it rest in a not too cold place with indirect sunlight and cross your fingers.
- Now, for the main root ball and the little shoot: everything done gently and trying to damage the roots the minimum, you want to rescue it from that soil, remove the excess of soil stuck to the roots, soak the roots for a while in more of the water+fungicide solution (again with a few drops of peroxide), and mist well the little shoot as well.
- Prepare a new container (throw everything in the first one, and if you want to keep the container itself sterilize it by boiling and wash thoroughly your hands) with some compost and at least 30% perlite mixed in it. Mist a little of the fungicide solution before mixing, just to leave it slightly moist. Fill the new container leaving room for the plant, avoid to pack the soil at all. The soil should be spongy.
- Place the washed plant in the new soil, cover it gently with more soil mix so only the shoot peeks out, and keep it for a few days in the same environment as the cutting (but not together), also protected by a humidifying bag the first 3/4 days at least.
Have the fungicide ready and keep a close eye to the little shoot. If any fungal stains develop again, apply more fungicide by misting.
If you are lucky, the plant will establish and recover. If you are very lucky, the cutting might survive the fungus as well and start to root. After ten days or so, if the cutting looks in good shape, move it to a new pot like you did with the little salvia, and at least for some time, keep them separated.
So good luck.
