Don't be surprised by the number of onions in this beloved Portuguese dish. The meat needs to be completely surrounded by aromatic slivers of onions, so that when it's done, both beef and onions are rich, smoky, slightly spiced, and bathed in a thin but intensely flavorful sauce. A good way to savor the juices is to serve generous helpings of rice in shallow bowls, spoon the meat and onions over it, and then ladle on lots of sauce.
In a 5- or 6-quart flameproof casserole or Dutch oven with a tight-fitting lid, melt 2 tablespoons of the butter over medium heat. Stir in the bacon and reduce the heat to medium-low. Cook, stirring occasionally, until the bacon is crispy but still tender, about 10 minutes. Using a slotted spoon, transfer to a plate, leaving the bacon fat in the pot. Set the bacon aside.
Generously salt the steaks.
Raise the heat under the pot to medium-high and cook the steaks until nicely but not heavily browned on both sides, 3 to 4 minutes per side. Transfer to another plate and set aside.
Add the onions, garlic, and 1 teaspoon salt into the drippings in the pot and cook over medium-high heat, stirring regularly, until reduced in volume and slightly softened, 6 to 8 minutes. If the moisture from the onions has not deglazed the bottom of the pot, add 1/2 cup water and scrape to loosen any browned bits. Transfer the contents of the pot to a bowl and set aside; let the pot cool.
Preheat the oven to 350°F.
Rub the inside of the pot with the remaining 1 tablespoon butter. Distribute half of the onion mixture evenly across the bottom. Lay the meat in a single layer over the onions. Scatter the allspice berries, peppercorns, chili blend, bay leaf, and half of the reserved bacon over the meat. Distribute the remaining onion mixture over the meat, completely covering it. Scatter the remaining bacon over the top and pour the wine, water, and any onion and beef juices on the plates into the pot. Add more water to just cover the solids, if necessary.
Bring to a simmer and let bubble gently for 5 minutes. Cover, transfer to the oven, and cook for 20 minutes. Reduce the oven temperature to 250°F and continue cooking until the meat is very tender, 3 to 3 1/2 hours more. Adjust the oven temperature as needed to maintain a very gentle simmer.
Turn off the oven, uncover the pot, and let the stew rest in the oven for about 30 minutes to concentrate the flavors.
Divide the meat among wide, shallow bowls. Spoon over abundant amounts of onions and broth, garnish with the parsley and serve with the rice.