Preheat a 6-quart air fryer to 390°F for 3 minutes. Beat egg with water and mix flour, cornstarch, salt, paprika, garlic powder and pepper in a separate bowl.
Toss chicken in the egg, lift out with a slotted spoon and shake gently through the flour mixture. Shake off excess coating and dab with oil until dry patches are moistened.
Arrange half the pieces in the basket with small gaps. Air fry for 5 minutes, turn or shake gently and cook for 4 to 6 minutes more until crisp and at least 165°F in several larger pieces.
Transfer to a rack and repeat with the remaining chicken. Keep the first batch uncovered so steam can escape.
Rest the last batch for 2 minutes and serve immediately.