Place water, milk, grits, bay leaves, and salt in a large, heavy-bottomed pot or Dutch oven and bring to a boil. Turn heat to low and cook, whisking attentively, 30-40 minutes, adding small amounts of water and lowering heat as needed if grits begin to stick to the bottom of the pot. Remove bay leaves, and add butter and parmesan and stir into the grits, tasting for salt. Stir in heavy cream and simmer about 1 more minute, or until the cream is incorporated. Cover until ready to serve.
Meanwhile, finely slice red bell pepper, jalapeño, and onion into uniform slices. In a large cast iron pan, sauté bacon over medium high heat until crispy, then drain on paper towels. Add the two sausages to the pan with reserved bacon fat and sear on both sides of the sausage until crisped and browned, about 4 minutes each side. Add sliced vegetables and sear, about 3 minutes. Add beer and Cajun seasoning and stir until vegetables and sausages are coated. Cover and turn heat to medium, leaving undisturbed for 5 minutes.
Remove lid, remove sausages using tongs and place on the same draining plate as the bacon. Add butter and heavy cream to the pan and simmer until sauce has thickened, about 5 minutes. While sauce is reducing, snip drained bacon into 1” pieces and add to the pan. As soon as sausages are cool enough to handle, cut each lengthwise, then into half-inch-thick half-moons. Add to the pan and stir.
Partition grits into bowls and ladle meat and sauce over the top. Garnish with a pinch of watercress and serve immediately.