Dice the bacon into 1/2-inch pieces and cook in a large pot or Dutch oven over medium-high heat, stirring occasionally, until the bacon is crispy and most of the fat has rendered, about 8-10 minutes. Once cooked, use a slotted spoon to transfer about 3/4 of the bacon to a paper towel-lined plate, reserving it for garnish. Leave approximately 2 tablespoons of the rendered bacon fat in the pot along with the remaining bacon pieces—this flavorful base is essential for the dish.
Dice the onion half and add it to the pot with the bacon fat and remaining bacon, stirring frequently until the onion becomes soft and translucent, about 3-4 minutes. The rendered bacon fat will carry deep, smoky flavors into the onion, creating an aromatic foundation for the beans. Don't rush this step—allowing the onion to soften properly ensures it will infuse the entire dish with rich flavor.
Add the canned navy beans (with their liquid) to the pot, followed by the tomato sauce, molasses, brown sugar, apple cider vinegar, mustard powder, smoked paprika, bay leaf, salt, and water. Stir everything together thoroughly, ensuring all the dry ingredients dissolve and distribute evenly throughout the mixture. The molasses and brown sugar will start to dissolve into the liquid, creating a rich, glossy sauce base that will coat each bean.
Bring the mixture to a gentle simmer, then reduce the heat to low and cover the pot with a lid. Let it simmer undisturbed for 25-30 minutes, allowing the flavors to meld and the sauce to thicken slightly as the beans absorb the seasoning. I like to stir gently every 10 minutes or so to ensure even cooking and to prevent the bottom from sticking, but mostly let it do its own thing—this gentle cooking prevents the beans from breaking apart and turning mushy.
Remove the pot from heat and carefully fish out and discard the bay leaf and cooked onion pieces using a spoon or fork. Taste the beans and adjust seasoning if needed—the sauce should be thick, glossy, and coat the back of a spoon. Transfer to a serving dish or bowls and top generously with the reserved crispy bacon pieces from Step 1.