Heat the oven to 375°F and butter a 9x13-inch baking dish. Bring a large pot of salted water to a boil and add the elbows; cook until just tender following the package’s directions and drain well.
Melt the butter in a heavy, medium saucepan over medium heat. Add the flour, onion, bay leaf, thyme, and peppercorns; cook over medium-low heat for 2 to 3 min., stirring constantly. (This is a roux.)
Slowly whisk the milk into the roux until thoroughly combined. Raise the heat to medium high; whisk constantly until the mixture boils. Simmer for 3 to 4 minutes, stirring constantly, until thickened. Lower the heat and continue simmering for about 10 minutes, stirring constantly. Strain the sauce into a large bowl, removing the onion, herbs, and peppercorns. Add 2 tsp. salt, the pepper, nutmeg, and shredded cheese, stirring until the cheese is just melted.
Toss the pasta with the cheese sauce and pour the mixture into the baking dish. Toss the breadcrumbs with the melted butter and spread them over the casserole. Bake until sizzling and lightly browned on top (cover with foil if the top browns too quickly), about 40 minutes.