In a saucepan, combine water, butter, salt, and sugar. Bring the mixture to a boil over high heat.
Reduce the heat and gradually add the flour while stirring continuously until the dough forms and pulls away from the sides of the pan.
Turn off the heat and transfer the dough to a large mixing bowl. Let it cool for about 4–5 minutes.
Add the egg and vanilla extract to the dough. Use an electric hand mixer to combine until smooth and fully incorporated.
Transfer the mixture into a piping bag.
Preheat the air fryer to 375°F (190°C). Lightly spray the air fryer basket with nonstick cooking spray.
Pipe small bite-sized pieces of dough into the basket, leaving space between them. You may need to cook in batches.
Brush the tops lightly with melted butter.
Cook for 12–15 minutes until the Air Fryer Churro Bites are golden brown and crisp.
Meanwhile, mix the granulated sugar and cinnamon in a shallow bowl.
Once cooked, immediately toss the churro bites in the cinnamon sugar mixture until evenly coated.
If the coating does not stick well, lightly brush the churros with melted butter or spray them with cooking spray before rolling in the sugar mixture.
Serve warm with chocolate syrup, honey, or Nutella.