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Pat the beef tenderloin completely dry with paper towels, then remove any kitchen twine. Season all over with 1 tsp kosher salt and 1/2 tsp black pepper. Heat 1 tbsp olive oil in a large oven-safe skillet over high heat until just beginning to smoke. Sear the tenderloin on all sides, including the ends, for about 2 minutes per side, until a deep mahogany crust forms all over. Transfer to a plate and brush the entire surface with Dijon mustard while still warm. Let cool to room temperature, about 20 minutes.
While the beef cools, make the duxelles. Pulse the cremini mushrooms, shallots, and garlic in a food processor until very finely chopped, scraping down the sides as needed — the mixture should resemble coarse, damp crumbs. Melt 2 tbsp butter in the same skillet over medium-high heat. Add the mushroom mixture, thyme leaves, and 1/4 tsp kosher salt. Cook, stirring frequently, until all moisture has evaporated and the mixture is dry and beginning to stick to the pan, 10–14 minutes. Add the dry sherry and cook, stirring, until the pan is dry again, about 2 minutes. Spread the duxelles onto a plate and let cool completely.
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