Setback's Friendly Fire reads:
"Whenever a Hero Target deals a non-Hero Target damage, that Hero may also deal Setback 2 damage of the same type".
I don't know what the current wording of Jack Handle is, but I'm pretty sure it still changes the targeting on all of Mr. Fixer's attempts to deal damage. So as far as I can see there's a loop where Mr. Fixer damages a non-Villain Target, this allows him to attempt to damage Setback, but actually damage all non-Villain Targets, which allows him to attempt to damage Setback, etc.
There's also a less infinite version of this combo using Dual Crowbars and Silver Lining instead of Jack Handle.