01 - In a large mixing bowl, whisk together the all-purpose flour, granulated sugar, active dry yeast, and salt until evenly distributed.
02 - In a small saucepan or microwave-safe container, combine the whole milk, water, and unsalted butter. Heat gently until just warm to the touch (approximately 105-110°F), ensuring the butter has melted. Pour the warm liquid into the dry ingredients and add the egg.
03 - Knead the mixture by hand on a floured surface or using a stand mixer fitted with a dough hook for 6 to 8 minutes, until the dough becomes smooth, elastic, and slightly tacky but not overly sticky.
04 - Transfer the dough to a lightly greased bowl, turning once to coat. Cover tightly with plastic wrap or a damp kitchen towel. Allow to rise in a warm, draft-free spot until doubled in size, approximately 1 hour.
05 - While the dough rises, beat the softened cream cheese, granulated sugar, and almond extract in a medium bowl until smooth and creamy. Fold in the finely chopped almonds until evenly distributed.
06 - Gently punch down the risen dough to release air bubbles. On a lightly floured surface, roll the dough out into a rectangle measuring approximately 16 by 10 inches. Spread the cream cheese filling in an even layer across the entire surface of the dough.
07 - Starting from the long side, roll the dough up tightly into a log, keeping the roll even and firm. Using a sharp knife or dental floss, slice the log into 12 equal portions.
08 - Arrange the sliced rolls cut-side up in a greased 9x13 inch baking dish. Cover loosely and let rise in a warm place for 30 minutes until puffed and nearly doubled.
09 - While the rolls complete their second rise, preheat the oven to 350°F. Position the rack in the center of the oven for even baking.
10 - Bake the rolls for 22 to 25 minutes, or until the tops are golden brown and the internal temperature reaches 190°F. Remove from the oven and allow to cool slightly in the pan.
11 - In a small bowl, whisk together the powdered sugar, milk, and almond extract until a smooth, drizzle-able glaze forms. Drizzle generously over the warm rolls and finish with a sprinkle of toasted sliced almonds. Serve warm.