Prepare the rack. Fit a wire rack inside a rimmed baking sheet to allow proper air circulation while baking the Challah.
Slice the bread. Cut the Challah loaf into 1.5 to 2-inch slices, placing them in a single layer on the prepared rack. Bake for about 15 minutes total, flipping halfway through, until dry to the touch. Let cool for 5 minutes.
Create pockets. Carefully slice a pocket in the middle of each Challah slice, leaving about a half-inch around the edge.
Mix the filling. In a small bowl, blend together the powdered sugar and cream cheese until smooth and well combined.
Stuff the Challah. Fill each pocket with about 2 tablespoons of the cream cheese mixture and 1-2 tablespoons of guava marmalade.
Whisk the custard. In a medium bowl, combine the evaporated milk, sugar, salt, vanilla extract, eggs, and cinnamon. Whisk until fully mixed.
Soak the slices. Gently submerge the Challah slices in the custard, soaking them for about 1 minute per side.
Cook in the skillet. Preheat a large skillet to medium-low heat and melt 1 tablespoon of butter. Add 2 soaked Challah slices and cook for about 4 minutes until golden-brown on the first side. Flip and cook for another 3 minutes.
Garnish and serve. Dust with powdered sugar and drizzle extra guava marmalade before serving.