Step 1: In a large mixing bowl, beat the cold unsalted butter and powdered sugar together with an electric mixer on medium speed until light and fluffy. This should take about 2-3 minutes.
Step 2: Add the vanilla extract and mix until just combined.
Step 3: Gradually add the all-purpose flour, mixing on low speed until the dough just comes together. Be careful not to overmix. If using, gently fold in the sprinkles.
Step 4: Gather the dough into a ball, flatten slightly into a disk, and wrap it in plastic wrap. Refrigerate for at least 15-20 minutes to firm up.
Step 5: Preheat your oven to 325°F (160°C). Line a baking sheet with parchment paper.
Step 6: On a lightly floured surface, roll out the dough to about 1/4-inch thickness. Use a small round cookie cutter (about 1-inch) or a knife to cut into small squares or circles. Reroll scraps as needed.
Step 7: Place the cookie bites about 1 inch apart on the prepared baking sheet. Prick each cookie once or twice with a fork (optional).
Step 8: Bake for 12-15 minutes, or until the edges are just set and very lightly golden. The cookies should still be pale. Do not let them brown too much.
Step 9: Remove from the oven and let cool on the baking sheet for 5 minutes before transferring to a wire rack to cool completely. Enjoy your festive shortbread bites!