Step 1: Cook the Bacon and Sauté the Vegetables

1. Cook the bacon: In a large skillet over medium heat, cook the chopped bacon until crispy. Remove with a slotted spoon and drain on paper towels, leaving about 1 tablespoon of bacon grease in the skillet.
2. Sauté the onion: In the same skillet with the bacon grease, sauté the diced onion (and optional bell pepper or mushrooms) until softened, about 5 minutes. Set aside to cool slightly.

Step 2: Prepare the Egg Mixture

3. Whisk the eggs: In a large mixing bowl, whisk together the eggs, milk, Dijon mustard (if using), salt, and black pepper until smooth and well combined.

Step 3: Assemble the Casserole

4. Layer the ingredients: Grease a 9×13-inch baking dish. Spread half of the cubed bread evenly across the bottom of the dish. Sprinkle half of the cooked bacon, sautéed onions, and 1 cup of shredded cheddar cheese over the bread. Repeat the layers with the remaining bread, bacon, onions, and cheddar cheese.
5. Pour the egg mixture: Slowly pour the egg mixture over the layered ingredients, pressing down gently with a spatula to ensure the bread absorbs the liquid evenly. Top with the remaining ½ cup of cheddar cheese and optional mozzarella cheese.

Step 4: Make-Ahead Option (Optional)

6. Refrigerate: Cover the assembled casserole with plastic wrap or foil and refrigerate overnight (up to 24 hours). This allows the flavors to meld and the bread to fully absorb the custard.

Step 5: Bake and Serve

7. Preheat the oven: Preheat your oven to 350°F (175°C). If the casserole was refrigerated, let it sit at room temperature for 15-20 minutes before baking.
8. Bake: Bake uncovered for 45-55 minutes, or until the center is set and the top is golden brown. A knife inserted into the center should come out clean.
9. Rest and serve: Let the casserole rest for 5-10 minutes before slicing. Garnish with fresh herbs like parsley or chives if desired, and serve warm.