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Gideon, The Oathsworn has an ability that transforms it into a non-human creature. If we should mutate on Gideon while he is alive what would happen? Let's say we mutate the card with Boneyard Lurker.

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The Mutate ability always triggers. The permanent's characteristics during your turn and after the end of it depend on which card is on top. During your turn, it's always a 5/5 white Soldier, and also a planeswalker if Gideon is on top. At end of turn, if Gideon is on top, it stops being a creature and remains a planeswalker, otherwise it becomes a 4/4 Lurker. In subsequent turns, you may active the permanent's loyalty abilities even if the Lurker is on top.

Mutate causes the two objects to merge:

724.1. One keyword causes an object to merge with a permanent. See rule 702.140, “Mutate.”

When you merge, you have to decide whether the merging spell goes on top or on the bottom of the permanent:

724.2. To merge an object with a permanent, place that object on top of or under that permanent. That permanent becomes a merged permanent represented by the card or copy that represented that object in addition to any other components that were representing it.

The characteristics of that object are defined by the top object, except for its abilities which are added together.

702.140e A mutated permanent has all abilities of each card and token that represents it. Its other characteristics are derived from the topmost card or token.

724.2a A merged permanent has only the characteristics of its topmost component, unless otherwise specified by the effect that caused them to merge. This is a copiable effect whose timestamp is the time the objects merged. (See rule 613.2.)

The layer system determines an object's characteristics. A merge is a copiable effect so it takes place in layer 1:

613.1a Layer 1: Rules and effects that modify copiable values are applied.

Gideon's +2 creates an effect that takes place in layers 4, 5, and 7, so it overwrites the merge effect:

613.1d Layer 4: Type-changing effects are applied. These include effects that change an object’s card type, subtype, and/or supertype.

613.1e Layer 5: Color-changing effects are applied.

613.1g Layer 7: Power- and/or toughness-changing effects are applied.

If Gideon is on top, it's a Planeswalker named Gideon, the Oathsworn. However, its +2 effect is still active, so it's also a white 5/5 Soldier creature. At end of turn, the effect ends and it's only a planeswalker, except it still has the Lurker's abilities.

If the Lurker is on top, the permanent has all the characteristics of a Lurker. However, the Gideon's ability is still active and overwrites all applicable characteristics, so it's a white 5/5 Soldier creature named Boneyard Lurker. At end of turn, the effect ends and it becomes a Boneyard Lurker as printed except it still has Gideon's loyalty abilities and retains the loyalty counters.

Notably, in future turns you can activate Gideon's loyalty abilities even if the Lurker is on top, because loyalty abilities work on all permanents, not just on planeswalkers:

606.3. A player may activate a loyalty ability of a permanent they control any time they have priority and the stack is empty during a main phase of their turn, but only if no player has previously activated a loyalty ability of that permanent that turn.

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  • If the creature that mutated onto Gideon is on top, do you still sacrifice it if it runs out of Loyalty counters? Does it lose Loyalty counters when damaged?
    – nick012000
    Commented Sep 28, 2022 at 8:05
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    No, only planeswalkers die when they have no loyalty counters on them, and if the creature is on top, it's not a planeswalker any more.
    – Hackworth
    Commented Sep 28, 2022 at 8:06

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