Proof.
Using Spaces, Lemma 65.16.3 we see that we may assume $S = \mathop{\mathrm{Spec}}(\mathbf{Z})$. Since $U \times _ X V = X \times _{X \times X} (U \times V)$ and since $U \times V$ is quasi-compact if $U$ and $V$ are so, we see that (1) implies (2). It is clear that (2) implies (3). Assume (3). Choose a scheme $W$ and a surjective étale morphism $W \to X$. Then $W \times W \to X \times X$ is surjective étale. Hence it suffices to show that
\[ j : W \times _ X W = X \times _{(X \times X)} (W \times W) \to W \times W \]
is quasi-compact, see Spaces, Lemma 65.5.6. If $U \subset W$ and $V \subset W$ are affine opens, then $j^{-1}(U \times V) = U \times _ X V$ is quasi-compact by assumption. Since the affine opens $U \times V$ form an affine open covering of $W \times W$ (Schemes, Lemma 26.17.4) we conclude by Schemes, Lemma 26.19.2.
$\square$
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