Bring squash, shallots, garlic, thyme, butter, vinegar, honey, a big pinch of salt, and ½ cup water to a boil in a large skillet. Reduce heat to medium-high, cover, and simmer until tender, 12–18 minutes. Uncover and cook, turning squash halfway through, until liquid is evaporated and squash is browned, 5–8 minutes. Transfer vegetables to a platter. Add 1 Tbsp. water to skillet and cook just to scrape up browned bits. Drizzle pan juices over squash; season with salt and pepper.