Sauté chicken strips in olive oil over medium-high heat until golden brown, about 10-12 minutes total.

In the same skillet, add Velveeta and cream cheese along with reserved pasta water; stir until melted and smooth.

Incorporate Italian seasoning, salt, and pepper; mix well.

Fold cooked spaghetti into the sauce until evenly coated.

Transfer to an oven-safe dish; layer with remaining cheese and bake at 350°F (175°C) for 25-30 minutes until bubbly.