Heat olive oil in a skillet over medium heat. Add red bell pepper, yellow bell pepper, and jalapeno pepper. Cook, stirring constantly, until mostly tender, about 3 minutes. Add cumin; cook and stir until peppers are coated, about 1 minute. Add half-and-half and let simmer until nearly boiling. Reduce heat to low; slowly stir in American cheese, fontina cheese, mozzarella cheese, red pepper flakes, salt, black pepper, garlic powder, onion powder, and nutmeg. Cook, stirring queso dip constantly, until cheeses are completely melted, about 5 minutes.
Preheat the oven to 400 degrees F (200 degrees C).
Place frozen chicken breasts on a baking sheet and bacon strips on another sheet.
Place both pans in the preheating oven. Heat chicken until thawed, about 12 minutes; remove from oven. Continue baking the bacon until crispy, 16 to 18 minutes more. Leave oven on; remove bacon, dry on a paper towel, and chop into pieces.
Place 1 cup of the queso dip in the bottom of a large ovenproof skillet or dish. Arrange chicken on top and sprinkle with Cheddar cheese and Monterey Jack cheese.
Bake in the hot oven until cheeses have melted, 5 to 8 minutes. Sprinkle with the chopped bacon pieces and green onion.