Cook the chopped bacon in a large Dutch oven over medium heat until crispy, about 5-6 minutes. Remove bacon with a slotted spoon, leaving about 2 tablespoons of bacon fat in the pot.

Add diced onions to the pot with bacon fat and sauté until translucent and fragrant, about 4-5 minutes. Add minced garlic and cook for another 30 seconds until aromatic.

Push sautéed vegetables to one side of the pot and add butter to the empty space. Once melted, whisk in flour to create a roux, cooking for about 1 minute while whisking constantly.

Gradually pour in chicken broth while whisking continuously to prevent lumps. Add diced potatoes and bring to a gentle boil. Reduce heat to medium-low and simmer for 15-18 minutes, until potatoes are fork-tender.

Using a potato masher or immersion blender, partially mash about half of the potatoes directly in the pot, leaving some chunky pieces for texture. Slowly stir in heavy cream and return most of the cooked bacon to the soup, reserving some for garnish. Season with salt and pepper to taste.

Serve in warmed bowls topped with reserved bacon, shredded cheddar, sour cream, and fresh chives.