It has always been explained to me that Setrap is definitively an emanation of Amitabha, who is most certainly enlightened. It is certainly possible for an enlightened being to manifest in a worldly form (nirmanakaya) as a means of being "closer" to sentient beings - it is just another method.
The phrase you quoted is "Because he
manifests through oracles and manifests as a gyalpo". I highlight the word "manifest" because this is most important. It is not stating that he is a gyalpo or a worldly being, but just assumes that form and manifests in this way. There is a clear distinction.
In this case, it would be helpful to look at what the texts and prayers say of Setrap, and how he is described. I refer to this prayer:
http://www.dorjeshugden.com/prayers/other-prayers/a-prayer-to-setrab/Let's look at some of the lines:
(verse 1):
From the nature of bliss-void or any other place
My Great Protector, powerful Setrab Chen
Only Buddhas can manifest from or exist in the nature of bliss-void (enlightenment). To invoke Setrap directly in this way is to invite him from a sphere of bliss-void, enlightenment, indicating his enlightened mind.
(verse 2):
Great manifested
Dharma KingA King of Dharma, is one who has gained mastery over all Dharma - an enlightened being.
(verse 3):
To you,
the leader of great bliss, Setrabchen,
I offer with enthusiastic inspiration, in the cup of bliss-protection,
The great offerings whose nature is bliss-void and wisdom.
Please accept them, with the
ultimate bliss-void attitude.
Again, one cannot be the leader of great bliss unless he has attained that himself. To attain great bliss is to be enlightened; and so, we infer that Setrab is enlightened.
Similarly, for him to be able to accept offerings with the
ultimate bliss-void attitude would mean he is enlightened.
(verse 4):
Dharma King, who appears from the wisdom which is inseparable from bliss,
again, a Dharma King refers only to an enlightened being; and a being who appears from wisdom / bliss can only be one who is enlightened.
The prayers go on... and this is just a sampling, but I think the references are very clear as to his enlightened nature. Important to note too that this was not just written by any normal practitioner but by a highly respected and attained lama, Gelek Rinpoche - so his references would not be arbitrary!
Hope this has been of some help. Peace.