Leave the potatoes in the bag and cook them in the microwave for 2 minutes less than the package instructions so they aren't too soft (they will cook in the pan, plus, you'll need to break them down further). Remove from the bag and let cool until cool enough to handle, then cut the larger potatoes into sixths and the smaller ones into fourths.
In a mid-sized pan on the stovetop or on a grill on medium heat, add the bacon and cook until crispy. Remove the bacon from the pan with a slotted spoon, leaving the bacon fat in the pan. Roughly chop the bacon and set aside. Add the butter to the bacon fat. Once it has melted, add the potatoes in one layer if possible. (If not, do the potatoes in batches.) Cook the potatoes on one side until a peek beneath reveals a golden crust, 10 to 15 minutes, then toss and repeat. Do this a few times; if doing in batches, you can pile the cooked potatoes on the side of the pan while the new ones get attention. Once the potatoes are almost done, push them all to the sides of the pan.
To the center of the pan add the peppers, onions, steak seasoning, a pinch of salt and a few grinds of black pepper. Cook the veggies, stirring, until the peppers and onions are tender but still have some crunch, about 5 minutes. Add the bacon back to the pan and toss everything together. Season with salt and pepper. Remove from the heat and stir in the cheese. Transfer to a serving bowl and garnish with the scallions.