Using the SAUTE feature on NORMAL, heat the olive oil.
Add the Italian sausage, breaking apart with the back of the spoon. Cook, stirring regularly until it loses its pink and begins to render fat.
Add onions, sweet peppers, and garlic and cook until softened.
Drain the meat of any excess grease.
Add Italian seasoning and salt and pepper to taste.
Cut the uncooked spaghetti in half and place them in the pot on top of the meat in a crisscross pattern.
Add Spaghetti sauce, diced tomatoes, and water. Do NOT stir. Push the noodles down gently so they’ll be submerged in the liquid.
Close the lid of the Instant Pot, making sure the valve is on SEALING position. Cook on HIGH pressure for 7 minutes. When the 7 minutes and the pressure cooker beeps, do a QUICK release.
Press CANCEL to turn off the Instant Pot and open lid. Let noodles stand for about 1 to 2 minutes and stir to distribute sauce.
Ladle on serving plates and sprinkle with Parmesan cheese, if desired. Serve hot.