In a large mixing bowl, combine 1 pound ground beef, 1/2 cup breadcrumbs, 1 egg, 1/4 cup milk, 1/2 teaspoon salt, 1/4 teaspoon black pepper, 1 teaspoon garlic powder, and 1 teaspoon onion powder; mix gently until just combined.

Using wet hands, roll the mixture into 12 to 16 meatballs about 1.5 inches in diameter to ensure even cooking.

Heat 2 tablespoons olive oil in a large skillet over medium-high heat until shimmering, about 1 minute; add meatballs in batches and cook for 6 to 8 minutes, turning occasionally, until golden brown on all sides.

Transfer meatballs to a plate with a slotted spoon, reduce heat to medium, add 2 tablespoons butter, and once melted add 8 ounces sliced mushrooms and 1 small diced yellow onion; cook for 5 to 7 minutes until mushrooms release moisture and onions soften.

Stir in 2 cloves minced garlic and cook for 30 seconds until fragrant; add 2 tablespoons all-purpose flour and stir constantly for 1 minute to create a light roux.

Slowly pour in 1 1/2 cups beef broth while stirring to prevent lumps, bring to a gentle simmer and cook for 2 to 3 minutes to thicken.

Return the meatballs to the skillet, stir in 1 tablespoon Dijon mustard and 1 teaspoon fresh thyme, reduce heat to low, and simmer for 8 to 10 minutes until meatballs are cooked through.

Remove skillet from heat; in a small bowl, whisk 1/2 cup sour cream with a splash of hot sauce to temper, then stir into the skillet until smooth, season with 1/2 teaspoon salt and 1/4 teaspoon black pepper, and serve.