01 - Preheat your oven to 350°F (175°C). Thoroughly grease a 9x13-inch baking dish with butter or nonstick spray.
02 - In a large skillet over medium heat, cook the sausage, breaking it into crumbles with a spoon, until it is fully browned and cooked through, approximately 7 minutes. Transfer the cooked sausage to a plate lined with paper towels to drain excess fat.
03 - Using the same skillet, sauté the chopped onion and diced bell pepper until they soften, about 5 minutes. Remove the skillet from the heat.
04 - In a large mixing bowl, vigorously whisk together the eggs, whole milk, salt, black pepper, garlic powder, and dried thyme (if using) until well combined.
05 - Evenly distribute the bread cubes in the prepared baking dish. Layer the cooked sausage and sautéed vegetables over the bread. Sprinkle 1 1/2 cups of the shredded cheddar cheese on top.
06 - Pour the whisked egg mixture evenly over the entire casserole. Gently press down on the bread cubes to ensure they absorb the liquid. Distribute the remaining 1/2 cup of cheddar cheese over the top layer.
07 - Bake the casserole uncovered for 40–45 minutes, or until it is puffed, displays a golden-brown hue, and is set in the center. Allow the casserole to cool for 10 minutes before slicing and serving.