Whisk flour, yeast, salt, sugar, Italian seasoning, garlic powder, and red pepper flakes in a large bowl.
Pour in water and 1 tablespoon olive oil. Stir with a spoon until a shaggy, sticky dough forms.
Cover the bowl tightly and let the dough rise at room temperature for 12–14 hours until bubbly and doubled.
Oil a 9x5-inch loaf pan with the remaining olive oil and dust the bottom with cornmeal.
Scrape the dough onto a lightly floured surface. Gently fold in half the mozzarella and half the pepperoni.
Shape into a loaf with a taut surface and place seam-side down in the prepared pan.
Cover and let rise until puffy, 30–45 minutes. Meanwhile, preheat the oven to 425°F.
Spoon the pizza sauce over the top. Add remaining mozzarella and pepperoni, then sprinkle Parmesan.
Bake 35 minutes until deeply golden and the center registers about 200°F. Cool 10 minutes.
Loosen the edges, lift out, and garnish with basil. Slice and serve warm.