Place the yeast and ¼ cup granulated sugar in the bowl of a stand mixer fit with the dough hook. Pour the warm milk and water over the top. Let rest 5-10 minutes until foamy.
Add the egg, ¼ cup butter, salt, and 3 ¼ cups flour. Beat 3 minutes until a soft dough forms. If it is still sticky add a little more flour. The dough should be very smooth, soft, and manageable. Transfer the dough to a great bowl, cover with plastic wrap, and let rise in a warm place for 60-90 minutes until doubled in size.
Place a heatproof bowl over a pot of boiling water and add the chocolate, 3 tablespoons butter, and honey. Stir until melted and smooth. Stir in the orange zest. Set aside.
Punch down the dough and divide it into four equal pieces. On a lightly floured surface, roll one piece into a 10 inch circle. Transfer the circle to a large baking sheet lined with parchment or a silicone baking mat.
Spread one third of the chocolate mixture onto the dough circle, keeping it in a thin layer and stay about half an inch from the edges. Sprinkle with one third of the pistachios.
Repeat two more times with dough, chocolate, and pistachio layers. Lay the final dough layer on top (you will not cover this one in chocolate). Use a pizza cutter to trim any wild edges and keep it in a perfect circle.
Use a small cup or biscuit cutter about 2 inches wide to create an indent in the center of the circle (do not cut through the dough). From this inner circle, use a pizza cutter or sharp knife to make 16 even cuts out to the edge of the circle.
Grab the ends of two of the pieces next to each other and twist twice away from each other (you can watch the video if this seems confusing). Place the ends together and pinch gently to seal. Repeat with the remaining pieces.
Cover the bread with plastic wrap and let rest 20 minutes. Preheat the oven to 375ºF.
Remove the plastic and bake the bread for 18-22 minutes until beginning to brown slightly. Allow to cool completely before dusting lightly in powdered sugar.
Vanilla Icing Dip
In a small bowl whisk together powdered sugar, vanilla, and 3 teaspoons milk. Add more milk a few drops at a time until the desired consistency is reached. I like it a little thick but still thin enough to dip the bread in. Alternatively you could drizzle thinned icing over the cooled bread, or spread it on thick like frosting.