In a medium saucepan, combine water, 2 tablespoons sugar, salt, vegetable oil, and vanilla extract. Bring to a boil over medium heat.
Once boiling, remove from heat and stir in the flour and baking powder until a dough forms.
Let the dough cool for about 10 minutes.
Preheat the air fryer to 350°F.
Scoop out small portions of the dough (about 1 tablespoon each) and roll them into balls.
Place the dough balls in the air fryer basket, making sure to leave space between them.
Lightly spray the churro bites with cooking spray.
Air fry for 8-10 minutes or until golden brown and cooked through.
While the churro bites are cooking, mix 1/4 cup sugar and cinnamon in a bowl.
Once the churro bites are done, immediately toss them in the cinnamon-sugar mixture until well coated.
Serve warm and enjoy!