Set the Instant Pot to the "Sauté" setting. Add the bacon and cook, stirring occasionally, until it becomes crisp, which should take about 10 to 12 minutes. Using a slotted spoon, transfer the cooked bacon to a plate, leaving the rendered fat in the pot. Next, add the chopped onion and cook until softened, approximately 5 to 7 minutes. Stir in the flour, garlic, and thyme, cooking for an additional minute until fragrant. Then, pour in the chicken broth and stir to dissolve the flour, which should take about 30 seconds.
Incorporate the potatoes, half-and-half, 1 1/2 teaspoons of salt, and 1/4 teaspoon of pepper into the mixture. Stir well to combine. Secure the lid on the Instant Pot, then set it to Pressure Cook on High for 8 minutes. Allow for a slow release of pressure once the cooking time has elapsed.
After releasing the pressure, carefully uncover the pot and mix in the sour cream. Using an immersion blender, blend the soup until some chunks of potato remain for texture. Alternatively, you can blend approximately half of the soup in a standard blender and then return it to the pot.
Serve the soup in bowls, topping each portion with additional sour cream, bacon, shredded cheddar cheese, and sliced chives. Enjoy your delicious, creamy potato soup!