Step 1: Prepare the Bacon and Beef: In a large Dutch oven or heavy pot, cook the bacon lardons over medium heat until crisp. Remove the bacon with a slotted spoon and set aside, reserving the rendered fat in the pot. Season the beef cubes generously with salt and pepper.
Step 2: Sear the Beef: In batches, sear the beef in the hot bacon fat until browned on all sides. Avoid overcrowding the pot to ensure proper browning. Remove the seared beef and set aside.
Step 3: Saut the Vegetables: Add the olive oil to the pot, along with the sliced onion and carrots. Saut over medium heat until the vegetables are softened and lightly browned, about 5-7 minutes.
Step 4: Dredge and Deglaze: Stir in the flour and cook for 2 minutes, stirring constantly, to create a roux. Gradually pour in the red wine, scraping up any browned bits from the bottom of the pot. Add the beef broth and tomato paste, stirring until well combined.
Step 5: Combine and Simmer: Return the seared beef and cooked bacon to the pot. Add the minced garlic, dried thyme, and bay leaf. Bring the mixture to a simmer, then reduce the heat to low, cover, and cook for 2 1/2 to 3 hours, or until the beef is very tender.
Step 6: Saut the Mushrooms: While the beef is braising, saut the quartered mushrooms in butter in a separate skillet until softened and lightly browned. Set aside.
Step 7: Add Mushrooms and Pearl Onions: During the last 30 minutes of cooking time, add the sauted mushrooms and thawed pearl onions to the pot. Stir gently to combine.
Step 8: Adjust Seasoning and Serve: Taste the stew and adjust the seasoning with salt and pepper as needed. Remove the bay leaf before serving. Garnish with fresh parsley, and serve hot over mashed potatoes, egg noodles, or crusty bread.
Optional Tip: For a richer flavor, use a high-quality Burgundy wine. If Burgundy is unavailable, a Pinot Noir is a good substitute. For a thicker sauce, remove some of the braising liquid towards the end of the cooking time and whisk in a cornstarch slurry (1 tablespoon cornstarch mixed with 2 tablespoons cold water). Return the mixture to the pot and simmer until thickened.