Chop the bacon into 1/2-inch pieces and cook in a large pot over medium heat until crispy, about 8-10 minutes, stirring occasionally. Remove the bacon with a slotted spoon and set aside, leaving about 3 tablespoons of rendered fat in the pot. Add the butter to the fat and let it melt, then add the diced onions, carrots, and celery. Sauté for 3-4 minutes until the vegetables begin to soften. Add the minced garlic and cook for another 30 seconds until fragrant.
Sprinkle the 1/2 cup flour over the sautéed vegetables and stir constantly for about 2 minutes, allowing the flour to cook into the fat and develop a nutty flavor—this creates a roux that will thicken the soup. Pour in the chicken broth slowly while stirring to avoid lumps, then add the bay leaves and the peeled, cubed potatoes. Bring the soup to a boil, then reduce the heat to low and simmer for 20-30 minutes until the potatoes are completely tender and easily pierced with a fork.
While the soup simmers, combine 3 cups flour, baking powder, 1 1/4 tsp salt, dried parsley, dried dill, and dried thyme in a medium bowl. In another bowl, lightly beat the egg, then stir it together with the milk. Pour the wet ingredients into the dry ingredients and mix until a shaggy dough forms. Knead the dough for about 5 minutes by hand until it becomes smooth and elastic. I like to knead dumplings on a lightly floured surface—it helps prevent sticking without adding too much flour that would toughen them.
Roll out the dumpling dough on a lightly floured surface to about 1/2-inch thickness. Using a sharp knife or bench scraper, cut the dough into 1/2-inch squares. When the potatoes in the soup are tender, increase the heat so the soup reaches a gentle boil at around 180°F-205°F (you want a rolling simmer, not a vigorous boil). Carefully add the dumplings to the hot broth one at a time, stirring gently to prevent them from sticking together. Simmer for about 5 minutes until the dumplings float and are cooked through.
Reduce the heat to low and slowly stir in the room-temperature cream to prevent curdling—this is important since adding cold cream to hot soup can break it. Season the soup with nutmeg, salt, and pepper to taste. Remove the bay leaves with a spoon or tongs. I use room-temperature cream because cold cream can shock the hot soup and cause the fat and milk solids to separate, which breaks the silky texture we're aiming for.
Ladle the hot soup into bowls and top each serving with some of the reserved crispy bacon pieces. Serve immediately while the soup is piping hot and the dumplings are still tender.