Preheat your oven to 375°F and place the racks in the middle and top third position. Prepare a 13x9 inch baking dish by spraying the bottom and sides with nonstick spray.
Season chicken breasts with 1 ¼ teaspoons salt, pepper, and Italian seasoning on all sides.
In a large nonstick pan, add oil and heat over medium heat. Add your chicken and cook for 5 minutes, until lightly browned. Flip and continue cooking until an inserted digital thermometer reads 160°F, another 5 minutes. Remove from heat and set on a cutting board. Do not burn the outside of the chicken. You may need to lower the heat to medium low and cook an additional 2 minutes to achieve this.
To the same pan, add your butter, onions, and ¼ teaspoon salt and cook over medium heat until the onions are softened and translucent, 4-5 minutes. Add garlic, and cook for an additional 1 minute, until fragrant.
Sprinkle the flour over the onions and stir for 1 minute until the flour is completely coated and the mixture looks pasty. Pour in the sherry (it will bubble vigorously), whisking vigorously to avoid clumps. Add in chicken stock and let come to a boil, stirring occasionally.
Slowly stir in the half and half, the remaining ½ teaspoon salt, nutmeg, and cayenne. Let mixture come to a simmer, stirring occasionally. Cook until the mixture has reduced slightly and thickened so it coats the back of a spoon, 5 minutes.
Meanwhile, cut the cooked chicken into a large dice. Remove the sauce from the heat and fold in cubed chicken, pasta, Parmesan, 1 cup shredded cheese, and 2 tablespoons parsley. Stir together until evenly mixed.
Pour mixture into your prepared baking dish. Top with the remaining cheese.
Place the pan on the middle rack and bake until the cheese is bubbly, 15-18 minutes.
Move the dish to the top third rack and continue baking until the topping is lightly browned, 5 minutes.
Remove from the oven, garnish with remaining 1 tablespoon parsley, let sit for 5 minutes, then serve immediately.