Combine milk, water, yeast, and sugar in a large bowl; stand 5 minutes until foamy. Mix in 1/4 cup melted butter, salt, and flour until soft dough forms.
Knead on floured surface 6-8 minutes until smooth; place in greased bowl, cover, and rise 1 hour until doubled.
Mix garlic, parsley, rosemary, and 1/2 cup melted butter in a small bowl; mix cheeses in another.
Roll dough into large rectangle about 1/4-inch thick; cut 2-inch squares.
Brush squares with herb butter; sprinkle with cheese. Stack 5-6 squares; place stacks on sides in greased 9x5-inch loaf pan. Repeat with all dough.
Cover; rise 30 minutes. Preheat oven to 350°F.
Brush top with remaining herb butter; bake 30-35 minutes until golden brown and cheese melts. Cool 10 minutes; serve warm.