Preheat oven to 375 degrees F. Coat a 1 1/2-quart oval baking dish or casserole with cooking spray. Arrange potato slices and shallot slices in the prepared baking dish.
In a small saucepan melt butter over medium heat. Stir in flour. Cook and stir 30 seconds. Whisk in the next four ingredients (through pepper). Heat and stir until thickened and bubbly. Stir in half of the cheese. Pour over potatoes in baking dish.
Bake, covered, 35 minutes. Sprinkle with the remaining cheese. Bake, uncovered, about 15 minutes more or until potatoes are tender and top is lightly browned. Let stand 10 minutes before serving. If desired, top with additional snipped fresh thyme.