Why am I getting undefined instead of null?

You are overwriting your argument, which is considered bad practice.

When you access daysOfWeek[0 -1] => daysOfWeek[-1] => undefined, you then evaluate is undefined < 1 which is falsy. So you enter the else, which returns day => undefined

The below code works

daysOfWeek = ['Monday', 'Tuesday', 'Wednesday', 'Thursday', 'Friday', 'Saturday', 'Sunday']

function returnDay(day) {
  if (day <= 7 && day >= 1) {
    return daysOfWeek[day - 1]
  }
  return null
}

console.log(returnDay(8))
console.log(returnDay(0))

Or, even more dense

daysOfWeek = ['Monday', 'Tuesday', 'Wednesday', 'Thursday', 'Friday', 'Saturday', 'Sunday']

function returnDay = d => daysOfWeek[d - 1] || null

console.log(returnDay(8))
console.log(returnDay(0))

Basically, you have two range checks in your code right now, and that's the biggest issue.

Here's the first check:

day = daysOfWeek[day - 1];

... which ends with undefined unless day has valid value (so that there's an element in daysOfWeek that corresponds to that value).

And here's the second check:

if (day > 7 || day < 1) { ... }

... which ends up doing wrong things because day variable gets a different value in that line of the first check. You can fix this, of course, by introducing another name...

const dayTitle = daysOfWeek[day - 1];
if (day > 7 || day < 1) { ... }

... but that means you're still checking the same condition twice. And it's never a good idea to repeat yourself.

So here's how it can be done:

function returnDay(day) {
  return daysOfWeek[day - 1] || null;
}

... yep, that simple: the boundary range check now is done by JS, not you and your code. In other words, if day value cannot be used as a proper index for that dayOfWeek array, you'll just get undefined (which will be coalesced by || null to, well, null).

And yes, having null as kind of default value in this case seems weird to me.

So I changed the arguement so that day is no longer being overwritten and it looks like this:

function returnDay(n){
    day = daysOfWeek[n-1];
    if (n  > 7 || n  < 1){
        return null
    } else {
        return day
    }
}
console.log(returnDay(8))
console.log(returnDay(0))

I now successfully get null for returnDay(0) and returnDay(8)