When running xtool setup and entering a path to a valid SDK, xtool can just hang on Extracting XIP (in my case, at 75%) when /tmp is full/nearly full.
Arch Linux, for example, mounts /tmp to tmpfs and has a maximum size of half of my available memory. On my PC with 32 GB of memory, this wasn't an issue and the installation proceeded without any issues. On my laptop with 12 GBs of available memory however, the installer just hung and gave no further information.
My quick and hacky workaround was to mount /tmp (or /tmp/DarwinSDKBuild) to some other location using a bind mount so that disk space is no problem.