There have been a few casual fun races only using default setups.
Also there are a few similiar topics where people tried to create (or asked for) setups that work work on every track.
However, setups are very important and no setup (stock or other) will work for all tracks.
Two easy examples are gearbox and downforce.
If you hit the engine's redline in the highest gear but there are still 500m to go before the next braking point then you will massively lose time. Same with downforce, if your car is too slow on the straights from too much drag then you already lost before the race (or hotlap) even started.
With too little downforce you will be slow on a twisted track because you have no grip in the turns.
Those are just two relatively simple examples but it is similar for the other parameters, too.
You would need
really good driving skills to keep up with someone whose car has 50km/h more topspeed or can take every corner 5% faster.
That is why everybody tweaks their car or downloads a setup. (
https://www.lfs.net/files/setups )
It is also possible to send setups ingame from player to player.
I think the problem with most "stock" setups is they are mostly too soft.
The most important trick in hotlaps is that there are unlimited retries.
In a race you need to avoid crashing else you might lose positions.
In a hotlap you just restart.
For example Fernbay Black has at least three places where it pays off to take a clearly visible risk:
The chicane after the first 180° turn, second chicane in middle of the long straight and the left/right turns just before the finish line.
The fastest lines are as straight as possible which means jumping two tires over the curbs. Often that leads to crashes.
Every part of the track is driven in this most extreme way possible, even more extreme than in qualification laps. With the right mix of luck and skill, lots of practice and many retries you finally get the perfect lap.
The hotlap does not show the hundred failed attempts.