Preheat the oven to 375°F (190°C). Butter a 9-inch (approx. 22 cm) shallow baking dish or a 1‑quart (1 L) ovenproof skillet. Preheating ensures even bake and fast finishing under the broiler for the topping.

Warm the milk in a small saucepan over low heat until just steaming (do not boil). Warming prevents shocking the roux and keeps the sauce smooth when combined.

In a wide sauté pan over medium-low heat, add the olive oil and 1 tablespoon (14 g) butter. Add the thinly sliced onions and a pinch of salt. Cook slowly, stirring every few minutes for 18–22 minutes, until the onions are deeply golden and sweet. Slow caramelization develops the onion’s natural sugars and adds savory-sweet depth to the sauce; higher heat will brown and bitterize them prematurely.

Add the minced garlic to the onions for the last 1–2 minutes of cooking and cook until fragrant. Garlic browns quickly—adding it at the end prevents it from burning while still allowing it to contribute aromatic sweetness.

Transfer the caramelized onions and garlic to a bowl and set aside. Return the sauté pan to medium heat and melt 1 tablespoon (14 g) unsalted butter. Sprinkle the 2 tablespoons (16 g) of flour into the butter and whisk continuously for 1–1½ minutes to make a blond roux. Toasting the flour briefly removes the raw taste and creates a nutty backbone for the béchamel.

Slowly add the warmed milk to the roux in a thin stream while whisking vigorously to avoid lumps. Bring the mixture to a gentle simmer over medium-low heat; simmer 3–5 minutes until it coats the back of a spoon. Gentle simmering thickens the sauce and cooks out any floury flavor.

Reduce the heat to low. Add the Dijon mustard, a pinch of nutmeg, 1/2 teaspoon freshly ground black pepper and 3/4 teaspoon sea salt (adjust at the end). Whisk in grated cheddar and three-quarters of the Parmesan in two additions, stirring each time until the cheese melts and the sauce is glossy. Low heat prevents the cheese from separating and keeps the sauce velvety.

Fold the reserved caramelized onions and garlic into the cheese sauce. Taste and adjust seasoning. The folded-in onions add sweet complexity and texture in every scoop.

Pour the mixture into the prepared baking dish. In a small bowl, toss the panko breadcrumbs with the remaining tablespoon (14 g) melted butter and the remaining Parmesan; scatter evenly over the top. The buttery panko creates a toasted, crunchy contrast to the silky interior.

Bake at 375°F (190°C) for 20–25 minutes until the edges are bubbling and the center is set. If you want a deeper golden top, switch the oven to broil for 1–2 minutes—watch closely to avoid burning. Baking finishes the sauce and concentrates flavors; broiling crisps the topping quickly.

Remove from the oven and let rest 5 minutes—this lets the sauce stabilize so it holds its shape when scooped. Serve hot with toasted bread, crudités or roasted potatoes.