Cut the potatoes into 1-inch cubes and place them in a large pot of cold salted water. Bring to a boil over high heat and cook for 5-7 minutes until just tender when pierced with a fork—they should still have a slight firmness since they'll continue to soften as they absorb the warm dressing. While the potatoes cook, mince the shallot finely, chop the chives and dill, and soft-boil the eggs (about 6-7 minutes in simmering water), then set them aside.
While the potatoes finish cooking, cook the bacon slices in a large skillet over medium-high heat for 6-8 minutes until crispy and browned on both sides. Transfer to a paper towel to drain, then crumble or chop into bite-sized pieces once cooled slightly. I find that Applegate Sunday Bacon cooks evenly and stays tender inside while crisping perfectly on the edges.
In a small bowl, whisk together the olive oil, Dijon mustard, red wine vinegar, minced shallot, sugar, salt, and freshly ground black pepper. The emulsification of oil and vinegar creates a silky dressing that will coat the warm potatoes beautifully and allow them to absorb all the flavors. Taste and adjust seasoning as needed—this dressing should be bold and tangy.
Drain the potatoes thoroughly and transfer them to a large serving bowl while still steaming hot. Pour the warm vinaigrette over the hot potatoes and gently toss to combine—the heat will help the potatoes absorb the dressing and develop deep flavor. Fold in the crumbled bacon and most of the fresh herbs, reserving some chives and dill for garnish. I like to add the herbs in two stages so the fresh, bright flavors shine through without getting too soft from the residual heat.
Transfer the warm potato salad to a serving platter or individual bowls. Top each portion with a soft-boiled egg, halved if desired, and sprinkle with the reserved fresh herbs for color and brightness. Serve immediately while the salad is still warm and the potatoes are at their most flavorful.