Disclaimer: Community trackers are created by Red Hat Product Security team on a best effort basis. Package maintainers are required to ascertain if the flaw indeed affects their package, before starting the update process.
The code indeed exists in setuptools. In setuptools-78.1.1/setuptools/_vendor/wheel/cli/unpack.py We will be checking whether this code is used by setuptools or not.
Based on Lumir Balhar's investigation made for this version of setuptools here: https://bugzilla.redhat.com/show_bug.cgi?id=2432108: The vulnerable wheel.cli.unpack.unpack() function is only used by the wheel CLI tool. Setuptools never imports or calls this function - I verified there are no references to wheel.cli.unpack anywhere in setuptools code outside the vendored wheel package itself. Setuptools uses its own implementation for unpacking zip archives, and that implementation properly sanitizes target paths, so the same exploit is not possible here.