Unknown to Naruto, the entire exchange was seen by another. He was the swordsman Sojiro Seta, in his past he was like Naruto but saved by an injured samurai and thus followed him ever since his savior's name was Makoto Shishio, they had met when he was very young and still living, with his abusive family. At the time the injured Makoto would have killed him, but thanks to his abusive family he ended up smiling even in the face of death.
For that reason, the swordsman spared him and taught him the meaning of "Survival of the Fittest", and only the strong rule while the weak suffer. That night he was forced to kill his family because they believe he had been hiding the killer and bringing death to their doorstep. Since then Sojiro left with him and became one of his most loyal subordinates.
Many years later because of the dual, he lost he had re-discover his purpose again. To his debt, he leaves with his master his enemy's secret to the final technique he discovered in the duel. In his duel because of the swordsman Kenshin Himura, the principle he had stood this many years shattered. Fortunately, it was also because of the same swordsman that pulled him back from the verge of eternal madness.
Though it was him that sent him therein in the first place Sojiro was grateful to him. Even Kenshin didn't give him an answer, the man had earned his respect. As the man had told him, "True answers can only be found and can not be given."
Following his advice, Sojiro to this day had traveled from country to country, helping those that were in need but never stayed in one place too long. Today he happens to come across the distress scream of a girl as he quickly comes to the scene only to find the boy going berserk rage. He watched in fascination as the bandits stood no chance.
In his travel he had met many people, thus heard many tales including the tail beast of the elemental nations. From what he had seen, the boy must have been a Jinchuriki. The shattering cry of the kid reminds him of himself as he fought for survival. After a while, the kid returns back to who he once was and spends time digging his companion's graves before burying them. Having seen enough he decided to make his appearance.
A short introduction later, Sojiro learned the people he had buried were strangers but for a short time, they formed a bond with one another. Noticing the sword on his hips, Naruto did not want to be weak anymore, so he begged Sojiro to teach him swordsmanship. Having faced the exact same past, Sojiro agreed but the child will have to travel along with him.
Just like what had happened to himself, Sojiro gifted Naruto a sword to defend himself with. He had instructed Naruto to learn as much as he could from his movements because it was how he had learned them. The boy may not be very smart, but he catches on quickly just by imitating all his teacher's movements. From time to time, Sojiro would give him advice as Naruto too to heart.
Not only was Naruto a natural with the sword, but he also learned quickly by doing than explanation. However, Sojiro wanted him to learn to understand thus took time to explain everything to him. In a relatively short time of six months, he had learned nearly everything from the swordsman including the "Shukuchi".
Seta Sojiro had not left anything out, after spending months with him he was very proud of his student. It was the first time the blond was praised thus he didn't know how to respond but he had his smiling face on just like his mentor. The friendly swordsman did double-take as Naruto had not just copied his style he also copied his behavior as well.
He didn't know why it happened nor how it happened, seeing his master smiling all the time probably became infectious. At some point, he must have copied him and now he didn't know how to anymore. It was also the reason Sojiro liked him so much, he was just a constant reminder of himself when he was younger. He wondered if this was how his old master must have seen in him.
Naruto is like a mirror of himself and Sojiro can see how he himself would have turned out. Not that he regrets his decision to follow Makoto, it interests him to see how far the boy would go with other masters. Thus he considered letting Naruto seek out other sword masters and see how it would turn out.
Unfortunately, their appearances were creeping other travelers as well as the locals. Maybe if they were alone and separated it wouldn't have been so bad, but when they stood side by side it was quite disturbing. Some officers came to investigate only to sweat-drop as the two just kept on smiling, ever he was little intimidated and he can't just arrest someone for being cheerful.
One time they crossed paths with some bandits and they got annoyed by the pair as they kept smiling even when being robbed. It somehow went too far as the two apologized at the same time while still smiling. The bandits took them for mocking them and charged, they didn't stand a chance. Both master and student easily cut them down, and they did it politely as they kill them one by one like they were discussing the weather.
After a few more encounters against bandits and even missing ninjas, Sojiro felt Naruto had learned everything from him. Even though he is a highly accomplished swordsman he felt he could never be matched someone like Kenshin Himura nor his late master. In fact, all of his techniques were just bits and pieces he discovered during his time working for his old master he never actually learned any real swordsmanship.
He was called genius, not because of his ability, but he is a prodigy swordsman without having a master. His old master Makoto called it "Natural Talent" he named his style "TenKen" because it was like a gift from the heavens. Therefore Sojiro advised him to seek another master called Hiko Seijuro.
Having fought in the samurai warrior, Sojiro kept tabs on everyone and continues to collect new information. It was part of his old job, thus it became a habit where he goes. Each time they stop in a new town or village he just asks around and does a little sightseeing. With his friendly and innocent looks, it was easy for him to get news without arising suspicion.
Hence, for the next month, Naruto had to head to the last known direction where his new master would be. He was told that the grandmaster swordsman Seijuro dislikes people and spends his time hiding as a potter.
Unfortunately, he was not given a description because even his mentor had never met him. All he knew was that he taught a student that defeated even Sojiro. As young as Naruto is, his current master had taught him well. He held no illusion that he is still a novice compared to a seasoned samurai or a real swordsman. If he had become too arrogant, he could be killed instantly. It was one of the few things Sojiro had reminded him constantly, especially after he had demonstrated his "Instant Kill Battojustu".
Having lived on the road also taught him how to stay alert at all times by always keeping half an eye open. His master showed him how to meditate to both sleeps and keep his mind aware of his surroundings. Especially where to keep his sword in case he needs it instantly.
Unlike living in a village or a building with a roof, where one would feel some form of security or safety. In the open, a time of silence is not a sign of peace but another predator's presence, Naruto had learned much and was taught how to deal with it. They often meditate together to find their centers, Sojiro said it helped to calm their minds and make them better swordsmen. However, Naruto never really understood it but followed his surroundings so they don't get ambushed.
The two knew they will eventually part ways, hence they were not sad when they finally part. During their time together Sojiro had told Naruto his Stiro, How he was like the blond in beginning, and eventually because of how he is now. As a swordsman, they have their own duty and honor, he was to continue to find answers. His quest may never end but Naruto had understood his logic thus never questioned his short-time master. Before they part ways, Naruto vowed that he will one day become a legendary swordsman, and no matter where he is he will hear of him and bring him honor.