Heat the oven to 350° F.
Heat a medium (10") skillet over medium heat. Add the Italian sausage, breaking it up as it cooks, until it's cooked through (no more visible pink), about 8-10 minutes. Use a slotted spoon to remove the sausage to a small bowl.
Add the oil to the pan, still over medium heat. Add the onions and pepper, plus ¼ teaspoon salt, and saute, stirring occasionally, until tender and the onions are translucent, about 8-10 minutes.
While the sausage and then the vegetables are cooking, in a large mixing bowl whisk the eggs, tomato paste, nutritional yeast, oregano, garlic powder, red pepper flakes, black pepper and ½ teaspoon salt. At first the tomato paste will break up into little bits but keep whisking until fully combined, with the eggs mixture becoming red.
Stir the olives and sausage into the peppers and onions, then pour in the egg mixture. Use your spatula to scoot any ingredients around in case they clump up together.
Turn the heat to low, cover the pan and let cook, undisturbed, until slightly set on the bottom, about 2 minutes.
Remove the lid and carefully slide the pan, uncovered, into the oven. Bake for 15-18 minutes. The top might puff up but it should look dry and cooked.
If using pepperoni, add the pepperoni to a cold, dry medium skillet and place over medium heat. Cook until just barely becoming crisp, about 10 minutes total, flipping each piece once halfway through. Transfer to a paper-towel lined plate.
Remove the frittata from the oven and let cool for at least 10 minutes (but longer is fine). Run a thin knife around the edge of the frittata to make sure it's loose, then use a spatula to slide the frittata onto a cutting board to slice into wedges. Add the pepperoni slices, if using, and serve.