Preheat oven to 400°F (200°C).
In a large skillet over medium-high heat, melt butter and add mushrooms. Season with salt and pepper. Cook until mushrooms are browned and their liquid evaporates, about 10 minutes.
Add garlic and nutmeg, cook for 1 minute. Stir in flour and cook for another minute.
Add broth and simmer, stirring frequently, until slightly thickened. Add cream and simmer until thick, about 5 to 6 minutes. Remove from heat.
Bring a large pot of salted water to a boil. Add green beans and cook for 5 minutes. Drain and rinse under cold water to stop cooking.
Toss shallots with flour, panko, and salt. Heat olive oil in a skillet and fry shallots in batches until golden brown. Drain on paper towels.
Stir green beans into the mushroom sauce and pour into a 9x13-inch baking dish. Top with crispy shallots.
Bake uncovered for 15 minutes, until bubbly and golden. Serve hot.