Prep the pan: Grease a 9x13-inch baking dish with butter or cooking spray.
Set aside.
Cook the sausage: In a large skillet over medium heat, cook the sausage, breaking it into crumbles, until browned and cooked through, 6–8 minutes. Drain excess fat if needed.
Sauté the veggies: Add the onion and red pepper to the skillet. Cook until softened, 4–5 minutes.
Season lightly with salt and pepper. Remove from heat and let cool slightly.
Build the base: Spread the cubed bread evenly in the prepared baking dish. Scatter the sausage and veggie mixture over the bread.
Sprinkle 1 1/2 cups of the cheese on top.
Make the custard: In a large bowl, whisk together eggs, milk, cream, salt, pepper, Dijon, garlic powder, and smoked paprika until smooth.
Combine: Pour the egg mixture evenly over the bread and sausage. Gently press down with a spatula so the bread soaks it up.
Chill: Cover tightly with foil or plastic wrap and refrigerate for at least 4 hours, preferably overnight (8–12 hours) for best texture.
Bake: Preheat the oven to 350°F (175°C). Uncover the casserole, sprinkle the remaining 1/2 cup cheese over the top, and bake for 45–55 minutes, until the center is set and the top is golden.
A knife inserted in the center should come out without liquid egg.
Rest and serve: Let it rest 10–15 minutes before slicing. Garnish with fresh parsley and serve warm.