Remove the small side muscle from each scallop if still attached. Rinse the scallops and pat them very dry with paper towels. Dry scallops are essential for the breading to stick properly.
Set up a three-step breading station. Place the flour in the first shallow dish. In the second dish, beat the egg with the water until smooth. In the third dish, combine the panko, italian breadcrumbs, parmesan cheese, garlic powder, smoked paprika, salt, and black pepper and toss to mix.
Dredge each scallop in the flour, shaking off the excess. Dip it into the egg wash, letting any extra drip off. Then press it firmly into the breadcrumb mixture, coating all sides evenly. Set the breaded scallops on a plate.
Preheat the air fryer to 400 degrees F for 3 minutes. Lightly spray the air fryer basket with cooking spray.
Arrange the breaded scallops in a single layer in the basket, making sure they are not touching. Spray the tops generously with cooking spray. This is key for achieving a crispy golden crust.
Air fry for 4 minutes, then gently flip each scallop and spray the other side with a light mist of cooking spray. Cook for an additional 3 to 4 minutes until the breading is golden brown and crunchy.
Transfer to a serving plate and garnish with fresh parsley. Serve immediately with lemon wedges and tartar sauce on the side.