Step 1: In a medium mixing bowl, whisk together the all-purpose flour, 1 tablespoon granulated sugar, baking powder, and salt until thoroughly combined.
Step 2: In a separate small bowl, combine the water, melted unsalted butter, and vanilla extract.
Step 3: Pour the wet ingredients into the dry ingredients. Stir with a spoon or spatula until a smooth, slightly sticky dough forms. Be careful not to overmix.
Step 4: Preheat your air fryer to 375°F (190°C).
Step 5: Lightly spray the air fryer basket with cooking spray.
Step 6: Pinch off small pieces of the dough, about 1 inch in diameter, and roll them into uniform bite-sized balls. Place them on a clean surface.
Step 7: Arrange the churro bites in a single layer in the prepared air fryer basket. Ensure there's enough space between each piece to allow for even cooking. You may need to cook in batches.
Step 8: Air fry for 8-10 minutes, or until the churro bites are golden brown and puffed. Shake the basket gently halfway through cooking to promote even browning.
Step 9: While the churro bites are air frying, prepare the cinnamon sugar coating. In a shallow bowl, combine the remaining 1/4 cup granulated sugar and 1 teaspoon ground cinnamon. Mix well.
Step 10: Immediately after removing the hot churro bites from the air fryer, toss them in the cinnamon sugar mixture until they are completely coated.
Step 11: Serve your homemade Fluffy Air Fryer Churro Bites warm with your favorite dipping sauces. Enjoy!