From about 1995 to 1998 it was common practice for setup programs to launch using a Windows 3.1 16-bit loader stub. This gave installers the ability to package multiple binaries for Win16, Win32s, Win32, and Windows NT for Alpha CPUs. At the time it was a reasonable thing to do since all of these platforms could execute 16-Bit Windows 3.1 applications.
Today, neither ReactOS nor 64-bit Microsoft Windows implement the ability to run 16-bit Windows 3.1 applications. The result is that there are many, many 32-bit programs that would run fine on these OSes, but are prevented from installing.
Download the InstallShield 3 Engine without Windows/Wine:
View the version properties of the Setup Launcher, usually called SETUP.EXE. (under Windows, right click, select Properties, and click the "Version" tab).
If the setup version is 3.xx.xxx, then as a convenience, you may download the Setup Engine executable directly from here rather than manually extracting it.
Place this file in a WRITABLE folder with the rest of your application install files and run it instead of setup.