If he was setting it up, Likealook Thug #278 (somebody name THAT reference), wouldn't be in the fight, he'd pop in later.
Anyways, that's one of the endless debates that was waged when people found out Nicholson had a bit in his contract about coming back in another Batman film. Whether that was true or another rumour, I have no clue, but SUPPOSEDLY that's why the line & the spare pair of clothes no one could explain were in the film, since the Joker's known in the comics for killing himself off when the heat gets too high.