It can be read in two ways. The most natural way is as you have read it. However, it is also valid in the sense of "this is a setback, but it's not all that b

It can be read in two ways. The most natural way is as you have read it. However, it is also valid in the sense of "this is a setback, but it's not all that bad". (You might write, "Still, this isn't the worst setback ever.") You would need to read enough to realize by later lack of a description of the worst setback to realize the former, most natural way, is not in use.