In a large deep sauté pan or cast iron skillet, melt the butter over medium heat.
Add the diced onion and cook, stirring occasionally, until translucent, about 5 minutes.
Add the ground beef and cook, breaking it up as it browns, until cooked through, about 4–5 minutes.
Add the tomato paste and garlic. Stir well into the beef mixture and cook for 2–3 minutes, stirring occasionally, until the tomato paste deepens slightly in color.
Add the smoked paprika, salt, sugar (if using), black pepper, and flour. Stir until well combined and cook for 1 minute.
Slowly whisk in the beef broth, then stir in the milk, Dijon mustard, Worcestershire sauce, and cream of mushroom soup until smooth and well combined.
Add the noodles, stir to combine, and bring the mixture to a boil over high heat.
Once boiling, reduce the heat to medium-low and simmer for 10–12 minutes, stirring occasionally to prevent sticking and help keep the sauce smooth, until the noodles are just tender and the sauce lightly coats the back of a spoon.
Remove from the heat and stir in the sour cream until fully incorporated.
Serve hot with freshly chopped parsley, if desired.