Prepare the pan: Line an 8-inch square cake pan with parchment paper, ensuring a 6-inch overhang on two sides for easy removal (alternatively, use an 8-inch springform pan). Place the pan in the freezer to chill for about 15 minutes.
Make the fudge sauce: In a medium saucepan, combine the sweetened condensed milk, chopped chocolate, 2 teaspoons of vanilla extract, and 3 tablespoons of butter. Heat the mixture over medium heat, stirring constantly, until the chocolate and butter are fully melted and the sauce is smooth, about 5 minutes. Remove from the heat and let the sauce cool for 10 to 15 minutes.
Layer the first half of the cake: Spread 2 pints of softened vanilla ice cream evenly into the chilled pan. Pour and swirl half of the fudge sauce over the ice cream, then sprinkle 1 cup of crushed pretzels on top. Freeze this layer for 1 hour to firm it up.
Add the second layer: Spread the remaining 2 pints of ice cream over the first frozen layer. Warm the remaining fudge sauce slightly if needed and swirl it on top. Add a final layer of crushed pretzels (about 1 cup). Cover the pan tightly with plastic wrap and freeze for at least 8 hours or overnight to allow the cake to set completely.
Remove the cake from the pan: Use the parchment paper overhang to lift the cake out of the pan. Transfer it carefully to a serving plate. Place the cake back in the freezer for 30 more minutes to firm up before decorating.
Toast the pretzel crumbs for garnish: Crush the remaining 1 cup of pretzels into smaller pieces. In a skillet over medium heat, melt the remaining 3 tablespoons of butter. Add the pretzel crumbs and toast them until golden brown and fragrant, stirring often, for 3 to 4 minutes. Remove from the heat and let them cool completely.
Whip the cream: In a medium bowl, whip the heavy cream with a handheld mixer until soft peaks form. Gradually add the confectioners’ sugar and the remaining teaspoon of vanilla extract, whipping until the mixture is smooth and fluffy.
Decorate and serve: Spread the whipped cream generously over the top of the frozen cake. Sprinkle the toasted pretzel crumbs over the whipped cream for a crunchy finish. Serve immediately for the best texture and flavor.