Hit SAUTE button on Instant Pot, and when it reads Hot, add olive oil and sausage
Cook sausage until brown, breaking it up and stirring frequently
Deglaze bottom of pot, if necessary, using a little bit of of the water, so that no sausage is stuck to bottom of pot
Hit CANCEL, then pour penne pasta over cooked sausage, and pour water over and around pasta
Pour marinara sauce on top of pasta, add Italian Seasoning, and spread out so that most of pasta is covered, but do not stir
Place lid on pot, turn valve to Sealing position, and hit PRESSURE COOK for 4 minutes
Pot will take a few minutes to reach pressure, then begin counting down and cook. When pot beeps, do a quick release by turning valve to Venting
When pin drops, carefully remove lid, and stir pasta. Keep pot on KEEP WARM mode, and stir in half of the pepperoni and 2 cups of mozzarella cheese until well blended
Top pasta with remaining cup of mozzarella and remaining pepperoni slices. Place lid on pot for about 5 minutes to allow cheese to melt
Top with shredded Parmesan cheese, and serve