Add 1 cup water into the Instant Pot, load the zucchini into a steamer basket and lower into the pot. Secure the Pressure Cooking Lid.
Using the display panel select the PRESSURE COOK function. Adjust the time to 0 minutes, then select START.
When the time is up, quick-release the pressure.
Select CANCEL, then drain the pot. Spread zucchini on a clean towel. Pat to remove moisture, then season generously with salt and pepper.
Coat the inside of a 1.5 quart casserole dish with cooking spray. Add half the zucchini, then 1/3 of the cheese, then the remaining zucchini and 1/3 of the cheese.
Add butter to the Instant Pot. Using the display panel select the SAUTE function, then START. When butter melts, add the shallots to the pot and sauté until soft, 3-4 minutes.
Sprinkle flour into the pot and whisk until fully incorporated. Add milk all at once, then cook and stir until sauce is thick and bubbly. Adjust seasonings.
Select CANCEL. Pour sauce over zucchini, then cover loosely with foil.
Rinse the pot, add 1 1/2 cups water and use the steam rack to lower the casserole into the pot. Return the casserole to the pot and secure the Pressure Cooking Lid.
Using the display panel select the PRESSURE COOK function. Adjust the time to 20 minutes, then select START.
When the time is up, quick-release the pressure, select CANCEL, then drain the water. Remove the foil and sprinkle the remaining cheese on the top. Secure the Air Fryer Lid.
Using the display panel select the BROIL function. Adjust the temperature to 400°F and the time to 8 minutes, then select START.
When Air Fry program is finished, remove the lid and place on the protective pad.
Remove the casserole and allow it to sit 10-15 minutes before serving.