Bring a large pot of salted water to a boil and cook the elbow macaroni 1 minute shy of package instructions (usually 7–8 minutes for al dente). Drain and toss with a drizzle of oil to prevent sticking. Why: cooking the pasta just underdone prevents it from going mushy when it finishes in the hot cheese sauce—the final texture should be creamy but with body.

Preheat the oven to 425°F (220°C). Line a rimmed baking sheet with parchment or a silicone mat for the shrimp and another small baking dish for finishing the mac if you want the crisp topping. Why: high heat crisps the panko quickly without overcooking the shrimp or drying the cheese sauce.

Pat the butterfly shrimp dry with paper towels. Season with 1 tsp salt, 1/2 tsp black pepper and 1 tsp paprika. Dredge each shrimp in 1/2 cup flour, shake off excess, dip into beaten eggs, then press into 3/4 cup panko to coat. Arrange shrimp on the baking sheet, drizzle or brush lightly with the 2 tbsp olive oil. Why: drying the shrimp and seasoning first ensures the coating adheres and the panko crisps evenly; brushing with oil mimics frying and yields a golden crust in the oven without excessive oil absorption.

Bake the shrimp on the middle rack for 8–10 minutes, flipping halfway, until panko is golden and shrimp are opaque. Remove and keep warm. Why: baking at high heat crisps the outside while keeping the shrimp juicy—flip to get both sides evenly browned.

Meanwhile, melt 4 tbsp butter in a medium saucepan over medium heat. Add the diced onion and 1 1/2 cups diced bell peppers and sauté until softened and slightly caramelized, about 6–8 minutes. Add the minced garlic for the last 30 seconds and cook until fragrant. Why: sweating and lightly caramelizing the vegetables builds sweetness and depth that cuts the richness of the cheese sauce.

Lower heat to medium-low, push the veggies to the side and add the 1/4 cup flour to the butter to form a roux. Cook for 1 minute, stirring, to remove the raw flour taste but not so long that it browns—this creates the thickening base for your sauce. Why: a cooked roux thickens the milk into a silky béchamel, which forms the backbone of a smooth cheese sauce.

Whisk in the 2 cups of whole milk a little at a time until smooth, then increase heat to medium and simmer gently until the sauce thickens and coats the back of a spoon, about 5–7 minutes. Season with 1 1/2 tsp salt and 1 tsp black pepper. Why: adding milk gradually prevents lumps; simmering activates the flour’s thickening power and concentrates flavor.

Reduce heat to low and remove the pot from direct heat. Gradually stir in the shredded sharp cheddar and Monterey Jack a handful at a time until melted and smooth. Taste and adjust seasoning. Why: adding cheese off direct heat prevents the milk proteins from seizing and the cheese from becoming grainy—slow incorporation yields a glossy, emulsified sauce.

Fold the cooked pasta into the cheese sauce until evenly coated. Transfer to individual shallow bowls or a 9x9 baking dish if you prefer to bake the topping. Why: mixing in the warm pasta lets it soak up the sauce so each bite is saucy and cohesive.

Make the crunchy topping: melt 2 tbsp butter and stir into 1 cup panko breadcrumbs with a pinch of salt and pepper. Scatter the panko over the mac & cheese. Why: butter-coated panko crisps evenly and adds a toasty, nutty contrast to the creamy interior.

Optional finish (for extra crunch): place the assembled bowls on a baking sheet and broil 2–3 minutes until the panko is golden—watch closely. Why: quick broiling gives an irresistible contrast between creamy cheese and a crisp top, but it’s fast and can burn if unattended.

Top each bowl with 3 of the crispy butterfly shrimp, a spoonful of the sautéed peppers and onions, and a scattering of sliced green onions. Serve immediately. Why: assembling at the end preserves the shrimp’s crunch while the hot cheese sauce keeps everything luscious—fresh scallions add sharp brightness.