First of all, good job on making it on your own don’t worry if it took you a while or not what is important is that you made it 
Secondly, the solution is good and straight to the important point, also strive for clean and understandable
Lastly, remove the console.log
s they make it harder to analyze 
I gave it a try and came up with another solution which can be more confusing depending on your experience (which probably goes against what I said in my second point
).
I will leave it here with an explanation on the thought process, hope it helps you learn a bit more.
function mutation(arr) {
const smallerWord = arr[0].length <= arr[1].length
? arr[0]
: arr[1]
const biggerWord = smallerWord >= arr[0].length
? arr[1]
: arr[0]
const biggerWordArr = biggerWord.split('')
const smallerWordArr = smallerWord.split('')
return smallerWordArr
.every(char =>
biggerWordArr.indexOf(char) >= 0
)
}
mutation(["Alien", "line"])
In code, you always want to try and make as little iterations as possible while keeping the code comprehensive so let’s grab that statement and run with it.
If you look at the challenge you need to find if all the characters of the smaller word are used in the bigger word so let’s start by finding which one is the smaller word.
const smallerWord = arr[0].length <= arr[1].length
? arr[0]
: arr[1]
const biggerWord = smallerWord >= arr[0].length
? arr[1]
: arr[0]
After we have that we get two variables with the word but, to iterate in a loop we need an array, so let’s make one
const biggerWordArr = biggerWord.split('')
const smallerWordArr = smallerWord.split('')
So now that we have an array we take advantage of the method every
that tries to find if a statement is true for all of an array if it is it will return a true, if it isn’t well, return a false.
We want the least iterations possible so we iterate the smaller word array and our statement will be “I want to check if each character is present inside of the bigger word array” which translate to code to biggerWordArr.indexOf(char) >= 0
.
return smallerWordArr
.every(char =>
biggerWordArr.indexOf(char) >= 0
)
We return immediately but we could’ve put it in a variable ok
as you did and then return it.
Note Improvements on it are incentivized 
Note 2 This is by no means a “correct” answer or the most “optimal” one, it’s just another way of doing the same thing while doing fewer iterations while still keeping the code clean
Edit: Longer would be a better wording than bigger but now I’m to lazy to change it he…heheheh