Preheat your oven to 320°F and line the bottom of your 8-inch cake pan with parchment paper. Place a large roasting pan on the lower oven rack and fill it with about 1 inch of hot water.

Beat the softened cream cheese in a medium bowl until completely smooth and lump-free. Add the egg yolks one at a time, mixing well after each addition until fully incorporated.

Pour in the milk and vanilla extract, whisking until the mixture is smooth. Sift the cornstarch directly into the bowl and whisk until no streaks remain.

In a large, completely clean bowl, beat the egg whites with an electric mixer on medium speed until foamy. Gradually add the sugar one tablespoon at a time while continuing to beat.

Increase the speed to high and beat until stiff peaks form, about 5 to 7 minutes total. The meringue should stand up straight when you lift the beaters and look glossy and smooth.

Add about one-third of the whipped egg whites to the cream cheese mixture and gently fold with a rubber spatula until mostly combined. Add the remaining egg whites in two additions, folding very gently to preserve the air bubbles.

Pour the batter into your prepared pan and gently tap it on the counter twice to release any large air bubbles. Use a spatula to smooth the top if needed.

Carefully place the cake pan into the roasting pan with water, making sure the water comes about halfway up the sides of the cake pan. Bake for 25 minutes, then reduce the temperature to 285°F and bake for an additional 55 minutes.

Turn off the oven and crack the door open slightly, leaving the cake inside for 15 minutes. Remove from the oven and let it cool in the pan at room temperature for at least 2 hours.

Run a thin knife around the edges of the pan to loosen the cake. Place a plate over the pan, flip it over, and gently remove the pan and parchment paper. Flip the cake right-side up onto your serving plate. Dust with powdered sugar if desired and slice with a sharp, thin knife wiped clean between cuts.