Set the Instant Pot to saute mode and add the olive oil and 1 tablespoon of the butter. Once hot, add the sliced mushrooms in a single layer as much as possible. Cook for 5 to 6 minutes, stirring occasionally, until golden brown and the liquid has evaporated. Remove about half the mushrooms and set aside for topping.
Add the diced onion to the pot with the remaining mushrooms and cook for 3 minutes until softened. Add the garlic and stir for 30 seconds until fragrant.
Add the arborio rice and stir for 1 to 2 minutes, toasting the grains until they become slightly translucent around the edges. Pour in the white wine and stir until it is mostly absorbed.
Pour in the chicken broth, salt, and pepper. Stir to combine, making sure nothing is stuck to the bottom. Press cancel. Lock the lid, set the valve to sealing, and cook on high pressure for 6 minutes.
When the cook time is done, do a quick release by carefully turning the valve to venting. Open the lid immediately.
Stir in the remaining 1 tablespoon of butter, grated parmesan cheese, and fresh thyme. Mix vigorously for about 1 minute until the risotto becomes creamy and glossy. If it seems too thick, add a splash of warm broth.
Serve in shallow bowls, topped with the reserved sauteed mushrooms, extra parmesan, and fresh chopped parsley.