Line a 9x9-inch baking dish with parchment paper, including up the sides of the dish. Set aside.
In a medium bowl, mix together the graham cracker crumbs and sugar. Add the melted butter and stir until fully combined with no dry spots.
Press the crumbs firmly into the bottom of the lined baking dish in an even layer. Flatten the crust with the bottom of a glass. Place in the refrigerator to chill while you prepare the toppings.
To a large bowl, add cream cheese. Using a hand mixer on medium speed, beat the cream cheese until creamy (1-2 minutes).
Add confectioners' sugar and vanilla. Beat again until no lumps remain (about 1-2 minutes).
Using a spatula, gently fold in 2 cups of whipped topping.
Remove the crust from the refrigerator. Dollop the cream cheese mixture over the crust and spread into an even layer.
Place the pan back into the refrigerator to chill while you prepare the remaining ingredients.
To a separate mixing bowl, add pudding mix and milk. Beat with a hand mixer on medium speed for 1-2 minutes, or until all lumps are gone. Set aside for 5 minutes to allow the mixture to thicken.
Pour the butterscotch mixture on top of the cream cheese layer.
Place in the refrigerator to chill for 2 hours, up to overnight.
When ready, top with the remaining whipped topping, butterscotch sauce, and butterscotch chips. Serve chilled.