How to properly use the word substitute?

The former.

Although it would be technically incorrect, because if you have sausage and bacon you should probably use both.

The former would be correct. Sausage would more properly be without the definite article, “the” since “the sausage” isn’t part of the original recipe. If you want to make the recipe conditional, you could say, “You may substitute sausage for bacon if that is your preference.”

@CWOTUS GA! lmao.

The former is correct. But you are right in that the use of “substitute” is confusing. It does not alone determine which item is being used – you have to look at the whole sentence. These two statements are equivalent:

Substitute the sausage for the bacon.

Substitute the bacon with the sausage.

The first. It means that you are replacing something with something else.

As the others have said, the former. This is however only true if you use “for.” If you used “in place,” as in:

“I would like to substitute the bacon in place of the sausage” that would mean that you are replacing the sausage with bacon, and not the other way around.

“Substitute the sausage for the bacon”.

I would use indefinite and definite articles to clarify. Definite articles for ingredients in the recipe. And indefinite articles for what you’re looking to replace it with.

Substitute the bacon with some sausage.

Substitute some sausage for the bacon.