What is Initial Context Setup Response in 5G NGAP?

It is the NG-RAN-to-AMF result message reporting what was established after Initial Context Setup Request.

Can Initial Context Setup Response include failed sessions?

Yes. It can carry successful and failed session lists at the same time, which indicates partial success.

What should I inspect first in this message?

Start with AMF/RAN UE identity correlation, then compare requested sessions with admitted and failed lists.

How is it different from Initial Context Setup Failure?

Failure is the explicit negative branch. Response can still report mixed outcomes where at least part of setup completed.