You might have answered your own question, Knix. The psychology of everyone at the cantina is in keeping a low profile. Gawking at a Jedi, or drawing attention to oneself or the establishment would be bad for business, so everyone just keeps their head down. Once everyone realized Obi-Wan was a Jedi, scum and villainy aren't likely to cause a stir with a keeper of peace and justice in the house.

Another explanation: Obi-Wan could have conceivably altered the perceptions of everyone in the cantina to have them see an arm getting blasted off rather than sliced off by a lightsaber. Not sure how effective the Jedi mind trick is on a mass scale versus an individual. The barkeeper yelled, "No blasters!" which may be because he saw both opponents draw blasters.

I see it as a nothing to see here move along scenario and the kind of thing that just happens as a matter of fact in places like the cantina. Everyone is there to go about their business and be left alone. Also the more we move away from the original three and even the sequels the more narrative continuity might stray.

It probably is best thought of as a(nother) continuity error. Even though Obi-Wan also says in the first movie that the Jedi were basically gone. And that might have been the official line of the Empire too, even Tarkin might have believed it. (He says to Vader, "The Jedi are extinct. Their fire has gone out of the universe. You, my friend, are all that's left of their religion.") But anyone who saw that event might have been able to expect a large reward, maybe even a pardon for whatever else they'd done, if they reported it to the nearest storm trooper.