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On a 6-quart Instant Pot, select More/High Sauté. Add the butter and let melt. Add the onion, ½ teaspoon salt and ¼ teaspoon pepper, then cook, stirring occasionally, until the onion is golden brown, about 6 minutes. Add the paprika and tomato paste and cook, stirring, until fragrant, about 1 minute. Stir in ½ cup water, scraping up the browned bits. Nestle in the chicken in an even layer, slightly overlapping the pieces if needed.
Using tongs, transfer the chicken to a dish and tent with foil. In a small bowl, whisk together the sour cream and cornstarch. Stir the mixture into the pot, then select More/High Sauté and cook, whisking constantly, until the sauce begins to simmer and is lightly thickened.
Press Cancel to turn off the pot, then taste and season with salt and pepper. Stir in 2 tablespoons of dill. Using potholders, carefully remove the insert from the housing and pour the sauce over the chicken. Sprinkle with the remaining 2 tablespoons dill.