Heat oven to 325°F. Pat beef dry. Season with salt and pepper, then toss with flour to lightly coat.
Cook bacon in a large Dutch oven over medium heat until crisp. Transfer bacon to a plate; leave drippings.
Add olive oil to the pot. Brown beef in batches in the bacon fat until deeply seared. Set browned beef aside.
Sauté onion and carrots in the pot until softened, about 5 minutes. Stir in mushrooms and cook until lightly browned.
Stir in butter, garlic, and tomato paste. Cook 1 minute, stirring, until fragrant and glossy.
Pour in red wine and scrape up browned bits. Simmer 2 minutes to reduce slightly.
Return beef and bacon to the pot. Add beef broth, thyme, crushed bay leaf, and pearl onions. Bring to a gentle simmer.
Cover and braise in the oven until the beef is fork-tender, 1 hour 45 minutes to 2 hours.
Skim fat. Season to taste. If needed, simmer uncovered a few minutes to thicken. Stir in parsley and rest 10 minutes.