The setup_xampp.bat file is only required to be run if installing to a non portable (fixed drive) XAMPP installation as it will add the full path including the drive letter to all XAMPP system files (just as in a normal XAMPP installation) thus making the installation non portable.
It is not required to be run if installing to a portable device and never was.
The readme_en.txt file in the xampp folder will also explain this.
It is therefore possible to run the lite version in a fixed drive installation if required or in a portable device if required by running or not running the xampp_setup.bat file.
It is also possible to run the full XAMPP version in a fixed drive or partition if required or in a portable device if required by running or not running the setup_xampp.bat file.
In XAMPP version 1.7.3 this setup_xampp.bat file had a much more pronounced roll to play and was coded but source and copyright protected by a previous developer Carsten Wiedmann and is why it is no longer used in that more useful form.