Thaw shrimp under cold running water, if frozen. Pat dry with paper towels; set aside.
Preheat air fryer to 375°F.
In shallow bowl, combine panko and ¾ teaspoon Old Bay seasoning.
In a medium bowl, combine flour, remaining ¾ teaspoon Old Bay seasoning, garlic powder, and cornstarch. Add the egg and water to the bowl; whisk until smooth. You should have a thick, wet batter.
Holding the shrimp by the tail, dip each shrimp individually into the batter. Batter should cover entire shrimp but not the tail. Let excess batter drip off into the bowl.
Dip the shrimp into the panko, making sure it’s covered well, except for the tail.
Lightly spray air fryer basket with avocado spray. Place shrimp in air fryer basket, arranging them in a single layer, not touching. Air fry for 5 to 7 minutes, or until breading is golden brown and shrimp is curled.
Repeat with remaining shrimp.
Video
Notes
Make Ahead: Prepare the shrimp except for frying. Arrange them in a single layer on a plate or tray, cover and refrigerate for up to 3 hours.
If you prefer, instead of refrigerating the prepared shrimp, freeze them in a single layer. Once they're frozen, put them in a tightly sealed container with parchment between layers. Cook as directed, adding a couple minutes for frozen shrimp.