In a small bowl, combine the milk, 1 teaspoon of sugar, and yeast. Whisk together and let the yeast bloom for 10 minutes, or until the mixture is very foamy on top.

Add the flour and remaining ⅓ cup of sugar to the bowl of a stand mixer fitted with a dough hook. Add the yeast mixture, egg, 2 tablespoons melted butter, vanilla, and salt. Mix on low speed until combined. Increase the speed to medium-low and mix until a smooth dough has formed, about 5 minutes. Stop and scrape the bottom and sides of the bowl as needed.

Shape the dough into a ball and transfer to a lightly oiled bowl. Cover with plastic wrap and let the dough rise in a warm spot (about 75F) until visibly puffed, 1 to 1½ hours. (The dough won’t quite double in size but should be about 50% larger.)

Transfer the dough to a lightly floured surface. Stretch and roll the dough into a 6x8-inch rectangle. Cut the dough into three strips, lengthwise (2x8”), then into fourths, crosswise, creating twelve 2” squares.

Preheat the air fryer to 375°F.

Working in batches, spray the basket with nonstick cooking spray. Add 4 to 6 squares, leaving space between each, then brush evenly with some of the remaining 2 tablespoons of melted butter.

Air fry for 6 minutes or until puffed and golden brown. (Check them after 3 minutes and brush with more butter if they aren’t browning evenly.) Remove from the basket and immediately dust with powdered sugar. Continue cooking the remaining squares.