Preheat oven to 375˚F.
Grease a 9x13 baking dish with a bit of butter and set aside.
Cut or spiralize the zucchini and yellow squash; place in a colander, sprinkle with salt, and let drain.
In the meantime, melt the butter in a 2-qt. saucepan set over medium heat.
Whisk in the flour; continue to whisk and cook for 2 minutes.
Slowly add in the milk, stir in Italian seasoning, and continue whisking constantly until smooth.
Simmer and whisk frequently for 8 to 10 minutes, or until sauce thickens.
Meanwhile, using paper towels, pat dry the squash and zucchini as much as you can and then place in a large bowl. Add garlic.
Add 1/2 tablespoon olive oil to the vegetables and season with salt and pepper to taste; toss to combine.
Heat remaining 1 tablespoon olive oil in a large skillet set over medium-high heat.
Add squash and zucchini to the hot oil and cook for 3 minutes, or until it just starts to soften; stir frequently. Remove from heat, drain, and set aside.
Spoon ¾-cup of the prepared cream sauce over the bottom of the buttered baking dish.
Arrange ½ of the squash mixture over the cream sauce.
Sprinkle with 1 cup of the mozzarella cheese and ⅓ cup of the parmesan cheese.
Add the rest of the squash mixture and cover with the rest of the cream sauce, then sprinkle with remaining cheeses.
Sprinkle panko crumbs over the top and drizzle with olive oil.
Bake for 30 to 35 minutes, or until top is golden.
Remove from oven and let cool 10 minutes.
Garnish with parsley and parmesan cheese. Serve.