The author of the passage discusses the almost human role of setting in different genres. Suvin ultimately arrives at the conclusion that science fiction is unique for the way it handles the physical, outside world in relation to the characters, morals, and sociological inquiries that drive the story.
In realistic fiction, the writer and reader pay particular attention to the ethics of the characters themselves. The elements of the physical world don't seem to take on ethics of their own. The author refers to this type of fiction as mainstream and naturalistic.
In some other genres, the outside or empirical world—the universe in which the characters have their experience—is almost like a being of its own. This is where the "pathetic fallacy" comes in. In a pathetic fallacy, inanimate objects, in this case the settings or circumstances in some speculative genres, take on a will of their own. Ethics, typically possessed by humans, are possessed by the outside world itself in a fantasy, folk tale, or mythical story. The author calls these other genres "metaphysical."
In science fiction, on the other hand, the characters are subject not only to their own individual moral principles but also to the principles of their world or circumstance—a world that is not impacted by the pathetic fallacy. In this way, the characters have only so much autonomy in a story of science fiction.