I read that the LG Blu-ray Writer BH16NS40 does not support bitsetting. How will this affect the burning of Blu-ray discs?
In no way.
Bitsetting was important for the compatibility of DVD+R media with standalone players in the early days of DVD burning.You could change the disc type from DVD+R to DVD ROM for playback in older players.
I don't intend to use the writer for burning DVD media, but is there no bitsetting for bluray media?
As katraine hinted, nope. There's no need. Like with CD-R/RW, there is only BD-R/RE (single layer/dual layer/triple layer/quad layer); it's all under one Blu-ray umbrella.