Bring a large pot of water to a boil on the stovetop.
Heat a large skillet over medium-high heat. Set aside 1 Tablespoon of butter, then melt remaining butter in the hot skillet.
Add mushrooms and sauté for 5-6 minutes, stirring only occasionally, until mushrooms have reduced in size and begun to brown.
Add shallot and garlic to skillet; stir to combine. Cook, stirring occasionally, for 3-4 minutes until shallot is soft and translucent. Add a generous pinch of kosher salt; stir to combine.
Add remaining butter to skillet and let it melt, then add flour and stir to combine. The flour will soak up any liquid in the pan and clump together in a rough paste (this is your roux, which will thicken the sauce). Cook for 30 seconds or so, until fragrant.
Add white wine a little at a time, stirring constantly to break up any lumps of flour.
Add milk, nutmeg, and a few turns of fresh cracked black pepper; stir to combine. Bring sauce to a low simmer and cook, stirring occasionally, until sauce is thick and creamy, about 5-8 minutes.
Turn off the heat, add parmesan cheese, and stir until the cheese is melted into the sauce.
Add plenty of salt to your boiling water, then cook gnocchi according to package directions (this usually takes just a few minutes - you’ll know the gnocchi are done when they float to the top).
Use a spider or slotted spoon to transfer cooked gnocchi to the skillet with the mushroom sauce. Stir to combine, then taste and add salt or pepper as necessary.
Garnish with parsley, more parmesan cheese, or fresh cracked black pepper (optional) and serve immediately.
