Preheat the oven to 425°F.
Melt 4 tablespoons butter in a large pot or Dutch oven over medium heat. Add the shallots and garlic and cook, stirring, until translucent, 1 to 2 minutes. Add the flour and cook, stirring, about 1 minute.
Whisk in the milk and water. Add the uncooked pasta and bring to a boil over medium heat, stirring occasionally, 7 to 8 minutes. Continue to cook until the pasta is al dente and has absorbed most of the liquid, 3 to 4 minutes more.
Remove from heat and stir in 5½ cups of shredded cheese, sour cream, green chiles, salt, paprika, chili powder, black pepper, and nutmeg. Season to taste with more salt, if desired.
Transfer the mac and cheese to a casserole dish and top with the remaining 1/2 cup of shredded cheese.
Melt the remaining 2 tablespoons butter in a small bowl in the microwave, about 30 seconds. Add the panko breadcrumbs and stir until well combined, then sprinkle evenly over the mac and cheese.
Transfer to the oven and bake, uncovered, until the cheese and panko are golden brown, 12 to 14 minutes, being careful not to burn.
Remove from the oven and let cool for 5 minutes before serving. Garnish with freshly chopped cilantro (if using), serve, and enjoy!