Prep the chicken. Place a chicken breast between two pieces of plastic wrap on a cutting board. Pound with a rolling pin to even thickness (about 1/4 inch). Repeat with the second piece of chicken. Set aside.
Prep the bacon. Cook the diced bacon over medium heat in a large, heavy-bottomed skillet on the stovetop, stirring occasionally until crispy. Remove the bacon with a slotted spoon. Discard all but ¼ cup bacon grease. Turn the heat off.
Make the buttermilk mixture & breadcrumbs. In a shallow bowl, whisk together the egg and buttermilk. In a separate bowl, whisk together the flour, breadcrumbs, Italian seasoning, garlic powder, salt, and pepper.
Dredge the chicken. Dip each piece of chicken first in the breadcrumb mixture, coating both sides, then in the egg mixture, coating both sides. Finally, dip each piece of chicken back into the breadcrumb mixture, coating both sides.
Cook the chicken breasts. Add enough vegetable oil to the skillet with the bacon grease to make it ~ ½ inch deep. Heat the oil over medium-high heat until shimmering. Add the chicken to the oil and cook for 3-4 minutes or until golden brown on the side in contact with the oil. Flip and cook for an additional 3-4 minutes or until the chicken is cooked through. Transfer the chicken to a plate lined with a paper towel.
Saute the shallot and garlic. Turn the heat to medium and add the butter to the skillet. Once the butter has melted, add the shallot and saute for a minute or until translucent. Add the garlic and saute for 20 seconds until fragrant.
Add flour. Whisk the flour into the contents of the skillet and cook for 30 seconds, whisking continuously.
Finish the gravy. Whisk in the chicken stock and cook, whisking continuously, until the mixture starts to thicken. Whisk in the half and half and Worcestershire sauce. Cook until the mixture has thickened into a nice gravy. Taste the gravy and season with salt and pepper if desired. Return the chicken to the skillet and flip to coat in the gravy.
Serve. Remove the skillet from the heat and let the smothered chicken rest for 4 to 5 minutes. Serve warm, garnished with fresh parsley and bacon.