Set a 6-quart or large Instant Pot to sauté on high. Once hot, add the oil, butter and sausage. Cook, breaking up the sausage with a wooden spoon, until no longer pink, about 5 minutes. Stir in the onion and potatoes and cook for another 2 minutes. Add the spinach, salt, pepper and crushed red pepper flakes, cooking until the spinach as wilted. Turn the machine off and transfer the mixture to a greased 7-inch round baking dish; set aside.
Clean out the inner bowl and return to the Instant Pot. Insert a metal trivet or wire rack and pour in the water.
In a large bowl, whisk together the eggs and milk until smooth. Pour into the baking dish over the sausage and vegetable mixture, stirring slightly to evenly incorporate. Sprinkle the top with the shredded cheese and place the dish in the Instant Pot. Lock the lid in place, making sure the valve is set to seal. Pressure cook on high for 30 minutes, and allow to natural release for 10 minutes before manually releasing any residual steam inside.
Carefully open the lid, remove the baking dish and garnish with chives before serving.
Note: You can brown the top of the casserole by placing under the broiler until golden brown before serving.