Preheat the oven to 350°F (175°C). Grease a 9x13-inch baking dish.
In a bowl, mix the chopped walnuts, pistachios, ground cinnamon, and 1 cup of sugar. Set aside.
Lay one sheet of phyllo dough in the prepared baking dish and brush it with melted butter. Repeat this process, layering and buttering 8 sheets of phyllo.
Spread a layer of the nut mixture over the phyllo. Add 4 more buttered phyllo sheets on top.
Repeat the layering process, alternating between nut mixture and phyllo sheets, until all ingredients are used, finishing with 8 layers of phyllo on top.
Using a sharp knife, cut the baklava into diamond or square shapes.
Bake in the preheated oven for about 45 minutes or until golden brown.
While the baklava is baking, prepare the honey syrup. In a saucepan, combine 1 cup of water, 1 cup of sugar, and 1 cup of honey. Bring to a boil, then reduce heat and simmer for about 10 minutes. Stir in 1 teaspoon of vanilla extract and set aside to cool.
For the custard, in a saucepan, heat 2 cups of milk over medium heat until warm. In a bowl, whisk together 1/2 cup sugar, cornstarch, egg yolks, 1 teaspoon vanilla extract, and salt. Slowly pour the warm milk into the egg mixture while whisking continuously. Return the mixture to the saucepan and cook over medium heat, stirring constantly until thickened. Remove from heat and let cool slightly.
Once the baklava is done baking, remove it from the oven and immediately pour the cooled honey syrup over the hot baklava. Allow it to soak for at least 2 hours.
Serve the baklava warm or at room temperature, topped with a generous dollop of custard.