Preheat your oven to 350°F (175°C). In a large bowl, toss the beef cubes with flour, salt, and pepper until evenly coated.
In a large Dutch oven or heavy pot, cook the diced bacon over medium heat until crispy. Remove the bacon and set aside, leaving the drippings in the pot.
In the same pot, brown the beef in batches over medium-high heat, ensuring not to overcrowd the pot. Remove the beef and set aside with the bacon.
Add the chopped onion and carrots to the pot, cooking until softened, about 5 minutes. Stir in the minced garlic and cook for an additional minute.
Return the beef and bacon to the pot. Pour in the red wine and beef broth, then add the tomato paste, thyme, and bay leaves. Bring to a simmer.
Cover the pot and transfer it to the preheated oven. Cook for 2 to 2.5 hours, or until the beef is tender.
While the beef is cooking, prepare the pearl onions and mushrooms. In a skillet, melt the butter over medium heat. Add the pearl onions and cook until golden, about 10 minutes. Add the mushrooms and cook for another 5 minutes.
Once the beef is tender, remove the pot from the oven. Stir in the cooked pearl onions and mushrooms. Let it sit for 10 minutes before serving.
Garnish with chopped parsley before serving.