We examine the gamma-ray signal from dark matter (DM) annihilation from analogues of the Sagittarius (Sgr) dwarf spheroidal galaxy in the Auriga cosmological simulations. For velocity-dependent annihilation cross sections, we compute emissions from simulated Sgr subhalos and from the Milky Way (MW) foreground. In addition to the annihilation signals from DM particles bound to Sgr, we consider for the first time the annihilation of DM particles bound to the MW that overlap spatially with Sgr. For p-wave models this contribution can enhance the signal by over an order of magnitude, while for d-wave models the enhancement can be over three orders of magnitude. For Sommerfeld and s-wave models, the corresponding emission does not significantly change. For the Sommerfeld model, the Sgr source can be visible above the MW foreground emission, while for s, p and d-wave models, the signal towards Sgr is most likely dominated by foreground MW emission. We interpret our results within the context of the observed gamma-ray emission from Sgr. We find that, given the background emission estimated from this region, the templates from simulations likely have spatial morphology that is too extended to explain the point-like emission that is observed.