Dice 1 medium onion and 2 medium celery stalks, and mince 3 garlic cloves and put it into a bowl. Peel potatoes, cut into 1/2-inch cubes, and place in a separate bowl.
Cut bacon into small pieces and place in a 6-quart or larger Instant Pot in a single layer. Cook with the Sauté function on medium until the bacon fat is rendered and the bacon is browned, stirring. Transfer the bacon to a paper towel-lined plate.
Add the onion, celery, garlic,1 1/2 teaspoons kosher salt, and 1/4 teaspoon black pepper to the pot. Cook on the Sauté function, stirring occasionally, until softened, about 5 minutes.
Add sherry and deglaze the bottom of the pot with sherry, stirring until all the brown bits are incorporated into the vegetables
Turn the pressure cooker off. Add the potatoes and chicken broth.
Lock on the lid and make sure the pressure valve is set to seal. Set to cook for 10 minutes under HIGH pressure. It should take about 15 minutes to come up to pressure, so this will take a total of 25 minutes
Meanwhile, place 1 cup whole milk and 2 tablespoons cornstarch in a small bowl and whisk until the cornstarch is dissolved. Slice 2 medium scallions
When the cook time is up, let the pressure naturally release for 10 minutes. Quick release any remaining pressure.
Turn on the Sauté function. When the soup is simmering, whisk the milk again to dissolve the cornstarch. Stir the milk and cream cheese cubes into the soup, and simmer until the soup is thickened and the cream cheese is melted, about 4 minutes.
Turn off the cooker and let the soup cool 10 minutes before serving so that it can thicken. Divide the soup between bowls and top with the crumbled bacon, cheddar cheese, and scallions.