Explanation for newbies: setuid is a special permission bit that makes an executable run with the permissions of its owner rather than the user executing it. This is often used to let a user run a specific program as root without having sudo access.
If this sounds like a security nightmare, that’s because it is.
In linux, setuid is slowly being phased out by Capabilities. An example of this is the ping command which used to need setuid in order to create raw sockets, but now just needs the cap_net_raw capability. More info: https://unix.stackexchange.com/questions/382771/why-does-ping-need-setuid-permission. Nevertheless, many linux distros still ship with setuid executables, for example passwd from the shadow-utils package.
fork bomb still being possible out of the box in a couple of characters is funny to me
That’s the thing about Linux. The developers generally assume you want to do the thing you’re doing. So they don’t stop you.