Brush phyllo squares with 1/4 cup butter, and arrange in 8 stacks, staggering corners; fit stacks into 6-ounce custard cups, allowing corners to overhang edges.
Whisk together remaining 1/4 cup butter, flour, mustard, and nutmeg in a saucepan until smooth; cook over low heat, whisking constantly, 1 minute. Gradually add milk; cook over medium heat, whisking constantly, until thickened and bubbly. Pour into a large bowl; gradually add 2/3 cup cheese. Whisk in yolks, salt, and pepper; cool to lukewarm.
Beat egg whites until stiff peaks form; fold into cheese mixture in 2 batches. Spoon evenly into prepared custard cups, and place in a large roasting pan. Add hot water to pan to a depth of 1 inch.
Bake at 350° for 20 minutes or until slightly firm to touch; cool soufflés in water on a wire rack.
Lift soufflés gently from cups, and place on a greased baking sheet. Sprinkle evenly with remaining1/3 cup cheese. Chill soufflés up to 4 hours, if desired.
Bake at 375° for 10 minutes or until thoroughly heated. Serve immediately.