Mustard's Quirk allows him to generate a poisonous, sleep-inducing gas, which he can control at will.
Those who breathe in the gas for a prolonged amount of time may suffer internal bleeding, due to the poison. Mustard is also able to detect movement through the gas, which prevents him from being sneak attacked. In contrast, Mustard can use the gas' mistiness to hide himself from view and perform surprise attacks of his own
Mustard is not immune to his own gas, implied by the fact that he constantly wears a gas mask when using his Quirk. This also means that anyone properly equipped with breathing apparatus can avoid the effects of his Quirk, if only temporarily. In combat, those who are capable of generating wind can blow away the gas, giving them an advantage, and if Mustard gets knocked unconscious, the gas will dissipate.