a man with beard sitting down playing an acoustic guitar.
The band sets up their instruments.
A band is a group while a man is a single person, also while the man is playing an acoustic guitar, the band sets up their instruments.
He refers to a man, not a band. Also, a guitar is one instrument so you can't pluralize a single instrument.
A man sitting down playing acoustic guitar is singular and specific, while band sets up their instrument is plural  and vague.