Bring water, butter, sugar, and salt to a boil in a saucepan.
Add flour and baking powder to the boiling mixture and stir until combined.
Allow the dough to cool for about 5 minutes before adding the vanilla extract.
Transfer the cooled dough to a piping bag fitted with a star nozzle.
Pipe bite-sized pieces onto parchment paper or a plate, leaving space between each piece.
Preheat the air fryer to 375°F (190°C) for about 5 minutes.
Place churro bites in the air fryer basket in batches, ensuring they are not crowded.
Air fry churro bites for 10-12 minutes until golden brown and crispy.
Allow churro bites to cool slightly before coating them in cinnamon-sugar.
Mix the cinnamon and sugar in a bowl and toss the churro bites until coated evenly.