The word "setup" is borrowed from English, where it means "arrangement, preparation." In Russian gaming slang it has taken root in several meanings at once, and each one is clear from the situation. The general idea is the same: something is done in advance so that everything works out later.
Setup as positioning
In CS2, this is the pre-agreed placement of players when defending a position. The team decides who stands on the site, who holds the passage, and who is ready to come to help. The phrase "they have a two-position setup" means that the defense is built on a clear scheme. For the attackers, it is a chance to read the positioning and choose a fitting response. A setup is usually prepared in practice and tailored to a specific map, and it may be changed during the match so that the opponent does not get used to it.
A setup differs from a default in that a default is the basic start of a round, while a setup is a specific positioning scheme that the team chooses for a particular task.
Setup as preparing a kill
In Dota 2 and other games with heroes and abilities, "setup" refers to an action that makes it possible to finish off a target. For example, one player stuns or slows an opponent, and a teammate uses that window to complete the kill. People say: "you set up my kill," "we need a setup for a gank." Here the word means a contribution to a kill that is not always visible in the stats. Players who know how to create such opportunities for the team are especially valued.
Setup as equipment
Outside of matches, a setup is a player's workstation: computer, monitor, peripherals, chair, lighting. Peripherals are the devices a player uses to control the game: mouse, keyboard, headset. Phrases like "show me your setup" or "a streamer's setup tour" refer to exactly this meaning. Both viewers and players enjoy such tours: it is interesting to see how the space is organized and what settings professionals play on.
The term often also covers settings: mouse sensitivity, resolution, the placement of interface elements. In that case people talk about a "gaming setup" in the broad sense, meaning everything that affects playing comfort.
How it is used
The verb "to set up" means to prepare: "set up smokes before the push," "set up positions before the round." In conversation, the noun easily changes meaning depending on the company: in a match chat it most likely refers to positioning or a kill, while in a discussion of a stream it refers to equipment.
A good sign of fluent speech is a clarifying phrase: "a setup on defense," "a setup for a gank," "a streamer's setup." That way the listener immediately knows which of the meanings is intended.