Drain the cans of water chestnuts and spread them out on a clean kitchen towel or paper towels. Pat them very dry so the bacon adheres and crisps well. Cut each slice of thin-cut bacon into thirds so each piece is just long enough to wrap around a water chestnut with a slight overlap.

In a medium bowl, stir together the soy sauce and 1/4 cup of the brown sugar until the sugar mostly dissolves. Add the drained, dried water chestnuts and gently toss to coat. Let marinate for 20–30 minutes, stirring once or twice.

Preheat the oven to 400°F (200°C). Line a rimmed baking sheet with foil for easy cleanup and place a wire rack on top if you have one. The rack helps the bacon cook and crisp more evenly, but you can also bake directly on the foil.

Remove each water chestnut from the marinade, letting excess drip off. Wrap each one in a piece of bacon so the ends overlap slightly, then secure through the center with a toothpick. Arrange on the prepared baking sheet, leaving space between pieces for air circulation.

Bake for 20–25 minutes, rotating the pan once halfway through, until the bacon is mostly cooked and starting to brown but not yet fully caramelized. Begin checking around 18 minutes, as ovens vary.

While the bacon bakes, whisk together the remaining 1/4 cup brown sugar, ketchup, Worcestershire sauce, garlic powder, smoked paprika (if using), and a few grinds of black pepper in a small bowl. The glaze should be thick but spoonable; if it is too thick, thin with 1–2 teaspoons of leftover marinade or a splash of water.

Remove the pan from the oven. Using a spoon or pastry brush, lightly coat each bacon-wrapped water chestnut with the glaze. Return to the oven and bake for another 8–10 minutes, until the glaze is bubbling and the bacon is deep golden and caramelized.

Let the bacon-wrapped water chestnuts rest on the pan for 5–10 minutes so the glaze can thicken slightly and the centers cool a bit. Transfer to a serving platter and serve warm.