Preheat a 6-quart air fryer to 390°F for 3 minutes. Beat egg with water; separately mix flour, cornstarch, salt, paprika, garlic powder, and pepper.
Toss chicken in egg; lift with slotted spoon and gently shake through flour mixture. Shake off excess; dab with oil to moisten dry patches.
Space half in basket. Air fry 5 minutes; gently turn or shake. Cook 4 to 6 minutes more until crisp and several larger pieces reach at least 165°F.
Transfer to rack; repeat remaining chicken. Keep first batch uncovered to release steam.
Rest last batch 2 minutes; serve immediately.