The setting is where the character is, in this case "the location". The location could be anywhere. A haunted house, a nice vacation spot, etc. If the character is inside a haunted house with a psycho killer after them obviously the character's heart will be palpitating hard, trying to get away from the situation, worried, scared, etc. But, if they are in a vacation spot they will be calm and relaxed, and they will act normal, enjoying themselves.
