Trim the chicken breasts and cut them into roughly 1½-inch bite-size pieces. Place them in a bowl with the pickle juice and refrigerate for 30 minutes to help season and tenderize the chicken.
Whisk the milk and egg together in a shallow bowl until smooth. Drain the chicken from the pickle juice and add the pieces to the milk mixture, turning to coat.
Add the flour, powdered sugar, paprika, chili powder, black pepper, salt, baking powder, garlic powder, and cayenne to a large resealable bag. Shake briefly to distribute the seasonings evenly.
Remove each chicken piece from the milk mixture, allowing excess liquid to drip off. Transfer the chicken to the seasoned flour, seal the bag, and gently shake until every piece is well coated.
Preheat the air fryer to 360°F. Lightly spray the basket with cooking spray, then arrange half of the nuggets in a single layer with space between each piece.
Lightly spray the tops of the nuggets and air fry at 360°F for 6 minutes. Flip each piece, spray lightly again, increase the temperature to 400°F, and cook for another 2-4 minutes, or until golden and the chicken reaches 165°F internally.
Transfer the crispy nuggets to a plate and let them rest for a minute or two. Serve immediately with ketchup, barbecue sauce or your favorite dipping sauce.
