Make the cream cheese mixture.
Beat the softened cream cheese with the powdered sugar, milk, and part of the vanilla until smooth, then gently fold in 1 cup of blueberries.
Start the first bread layer.
Butter a large baking dish, then scatter half of the bread cubes across the bottom in an even layer.
Add the creamy center.
Spread the blueberry cream cheese mixture over the bread layer as evenly as you can.
Top with the rest of the bread.
Add the remaining bread cubes on top to create the second layer.
Whisk the custard.
In a large bowl, whisk together the milk, eggs, the remaining vanilla, cinnamon, and nutmeg until fully combined.
Pour and soak.
Pour the custard over the layered bread, making sure the top gets evenly moistened. Scatter the remaining cup of blueberries over the casserole. Cover tightly and refrigerate for 8 hours or overnight.
Bring it closer to room temperature.
Set the casserole out for about 30 to 60 minutes before baking so it can warm slightly.
Bake until set.
Bake at 375°F, covered with foil, for 45 minutes. Remove the foil and continue baking for about 30 minutes more, until the center is set and the top is lightly golden.
Cool slightly and serve.
Let the casserole rest briefly before slicing so it is easier to serve