PASTA: Bring a large pot of water to a boil. Once boiling, generously salt the water and return to a boil. Add pasta and cook according to package directions, subtracting 1 minute. Drain, shake off excess water and immediately add pasta back to pot. Add butter and gently stir until butter is melted. Set aside to cool while making sauce. Preheat the oven to 350 degrees F.
BACON: Meanwhile, dice the bacon and cook, over medium-high heat, in a large heavy-bottom pot (we'll use this pot to make the cheese sauce) until golden and cooked to desired preference. Use a slotted spoon to remove the bacon onto a paper-towel-lined plate. Drain all but 1 tablespoon of the grease.
SAUCE: Reduce heat to medium and add in the diced jalapeños. Sauté for 1-2 minutes and then add in garlic, paprika, garlic powder, and onion powder. Season to taste with salt and pepper; I add 1 teaspoon fine sea salt and 1/2 teaspoon pepper. Sauté for 30 seconds or until fragrant. Add in the butter and once melted, add in the flour. Whisk constantly, cooking for 1 minute. While whisking, slowly pour in the evaporated milk. Add very gradually so it can thicken. Cook for 5-7 minutes or until thickened properly (Note 5).
CHEESE: While sauce is thickening, add unwrapped cream cheese to the microwave. Microwave for 10 seconds, flip and microwave for another 10 seconds. Flip and microwave once more or until very soft.
FINISH SAUCE: Add cream cheese into the sauce and briskly whisk until completely integrated and smooth. Remove pot from heat and add in the other cheeses -- Cheddar and pepper-Jack. Stir until smooth (it's okay if it isn't fully melted -- we're baking!).
PANKO TOPPING: (optional): Meanwhile, melt butter over medium heat in a medium skillet. Add panko and salt to taste (I add 1/4 teaspoon) and stir to coat. Continue cooking until crumbs become golden brown. Remove from heat and set aside for now.
BAKE: Pour the sauce, scraping every last bit of it over cooked pasta (it may seem super saucy, but this will keep it from becoming dry after being baked!). Add in the reserved bacon. Give everything a quick stir and then a quick taste test -- add more salt/pepper if needed. Transfer mixture to a lightly greased 9x9-inch pan. Sprinkle panko topping evenly over pasta and if desired, add a thinly sliced jalapeño on top. Bake for 10-15 minutes or until slightly thickened at the edges and light golden brown on top (don't bake too long or the cheese sauce will dry out!). Remove and serve immediately! Enjoy!