• Heat oven to 350ºF. Lightly butter a 9x13-inch baking dish and set aside.
• Combine the milk, half and half, shallot, dry mustard, and bay leaf in a 3-quart saucepan. Heat over medium-low heat, stirring occasionally until the dairy reaches approximately 175℉, about 5 minutes. Do not boil.
• Remove from the heat, cover, and steep for 10 minutes. When the time is up, remove the bay leaf and return the lid (or transfer to a thermos) to keep the infused dairy warm.
• Place the pasta and 2 teaspoons kosher salt in a 3-quart saucepan. Add just enough cold water to cover the pasta. Bring to a boil over medium-high heat, stirring often to prevent sticking. Cook until just barely al dente.
• Drain the pasta in a colander with a large bowl underneath to collect the pasta cooking water. Reserve 1/2 cup of the water and set aside to cool.
• Melt the butter in a 3-quart saucepan over medium-low heat. Whisk in the flour and cook, stirring frequently, until the roux is pale blonde and no longer smells of raw flour, approximately 1 1/2 to 2 minutes. Reduce the heat to low and add the paprika. Stir for 20-30 seconds, allowing it to bloom in the roux without scorching.
• Gradually whisk in the warm infused dairy, beginning with a small addition to produce a smooth paste before introducing the remainder. Bring to a very gentle simmer, whisking frequently. Cook for approximatley 3 minutes, until the starch is fully gelatinized and the sauce coats the back of a spoon. Remove from the heat and allow the béchamel to cool to 145℉-150℉.
• Crack the egg into a medium bowl and whisk until thoroughly homogenous. While whisking constantly, drizzle in the reserved 1/2 cup pasta water. Begin with a few drops, then continue in a thin stream.
• Gradually whisk the egg mixture into the warm béchamel until completely incorporated. Do not return the egg-enriched béchamel to the burner.
• Combine the cheddar and 5 ounces of Monterey Jack in a bowl, mixing thoroughly. With the saucepan off the heat, add the cheese mixture in approximately four equal portions, stirring gently until each addition is incorporated before proceeding. Allow the residual heat of the sauce to melt the cheese. It's ok if the cheese doesn't fully melt. Stir in the white pepper and season with additional salt if desired. Do not return the finished sauce to the burner.
• Fold the pasta into the sauce until thoroughly coated and transfer to the prepared baking dish. Cover with a kitchen towel and set aside while you make the topping.

The Topping:

• Melt the 3 tablespoons butter in a 10-inch skillet over medium heat. Add the panko breadcrumbs and salt. Toast, stirring frequently until golden brown, about 3 minutes.
• Remove the kitchen towel from the mac and cheese and sprinkle the remaining 3 ounces Monterey Jack evenly over the surface, followed by the toasted panko.
• Transfer to the oven and bake until the center reaches 155℉, about 15 minutes. Remove from the oven to a cooling rack or trivet and rest, allowing the temperature to rise to 160℉, another 5 minutes.