Crisp the Bacon: In a large pot or Dutch oven, cook diced bacon over medium heat until crisp. Remove and drain on paper towels. Reserve about 1 tbsp bacon fat in the pot (or use butter).
Sauté Aromatics: Add the butter, then sauté onion, garlic, and carrots until softened, about 5–6 minutes.
Add Squash and Apple: Stir in the cubed butternut squash and chopped apple. Season with salt, pepper, nutmeg, and smoked paprika.
Simmer: Pour in chicken broth, bring to a boil, then reduce to low heat. Cover and simmer 20–25 minutes, until squash is very tender.
Blend Until Creamy: Use an immersion blender (or carefully transfer in batches to a countertop blender) and blend until smooth and silky.
Add Cream & Bacon: Stir in heavy cream and half of the cooked bacon. Simmer uncovered for 5–10 minutes to thicken slightly.
Adjust Seasoning: Taste and adjust with more salt, pepper, or nutmeg as desired. Serve warm, topped with remaining bacon and optional garnishes.