In a large Dutch oven or heavy-bottomed pot, heat the butter and olive oil over medium heat until the butter melts and foams. Add the finely chopped onion and cook for 5 to 7 minutes, stirring occasionally, until the onion is translucent and softened.
Add the minced garlic to the pot and cook for 1 minute, stirring constantly, until the garlic is fragrant.
Add the diced potatoes, chicken broth, kosher salt, black pepper, and dried thyme to the pot. Increase the heat to high and bring the soup to a boil. Once boiling, reduce the heat to low, cover the pot, and simmer for 15 to 20 minutes, or until the potatoes are very tender and easily pierced with a fork.
Use a potato masher to carefully mash about half of the potatoes directly in the pot until the soup reaches your desired consistency. It should be thick and creamy with some potato chunks remaining.
Reduce the heat to the lowest setting and stir in the heavy cream and room-temperature sour cream until the soup is smooth and uniformly creamy. Heat gently for 2 to 3 minutes until warmed through, but do not let it boil.
Ladle the hot soup into bowls and garnish with the crumbled bacon and fresh chives before serving.
