I'm also not an expert but I'll try to share my intuition here and I would be happy if an expert jumps in with a real example and/or debunking.
To make sense of the quote we need a nonstandard model of set theory where the notion of "standard set" makes sense. Presumably, standard sets are sets coming from a standard model of set theory V, which our nonstandard model is built around. So when we say "standard model of PA" we mean the naturals coming from V.
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