Dog Tries to Bite When in Cage?

I have a Pit/Boxer mix. He is a male and he is a year and a half old. We have had him for a week and he's a very well trained dog. We got him from a family that was being stationed where there is a bully breed ban. He's a very good dog and we have no issues besides one.

The only issue we have is when he's in his cage/kennel and anyone besides me or my fiance sticks their fingers through the slot to pet him he tries to bite. He has nipped at my children and a couple of our friends. He doesn't really give a warning besides slightly lowering his head and then he goes for the nip. It's quick, but only once. He doesn't try to nip multiple times or try to attack you. Funny thing is I can let him out of his kennel immediately after that and he's fine. It's not like he is trying to attack anyone. He comes out wagging his tail and wanting love. I asked his previous owners if they ever had that issue and they said that they hadn't. He found it unusual as well. I'm not sure if he's nipping because he's still a little confused about being in a new place and his kennel is his familiar place and he's just protecting his space or what.

I just wanted some tips on how to get him to not nip at people when they do that because I don't want anyone to get hurt and I don't want him or us getting in trouble if he does hurt someone because they stuck their fingers in there.

Thanks for your help.