How to change team of players?

Use the table.remove function on the table of players. It will still return the desired index, and will ensure that they cannot be found in the table. This way, you can iterate through the table and set everyone's team to Survivors.

Note: Lighting is not meant for storage. Place your item in ServerStorage.

local ItemToGive = game.ServerStorage.Tag --Lighting is not meant for storage!
local SetNumber = 0

function survivors(plrs) --function to convert team of plrs to survivors
	for _,v in next,plrs do
		v.Team = game.Teams.Survivors
	end
end

while wait(10) do
	local players = game.Players:GetPlayers()
	if #players >= 1 and SetNumber < 1 then
		local plr = math.random(#players);
		local player = table.remove(players,plr) --table.remove
		print(player)
		ItemToGive:Clone().Parent = player.Backpack
		player.Team = game.Teams.Assassins
		survivors(players) --call function
		SetNumber = SetNumber + 1
		print(SetNumber) 
	end
end