Preheat the air fryer to 375°F (190°C).
In a medium bowl, mix together the softened cream cheese, shredded cheddar cheese, chopped jalapeños, garlic powder, onion powder, smoked paprika, salt, and black pepper until well combined.
Using a sharp knife, carefully cut a horizontal pocket into each chicken breast without cutting all the way through.
Divide the cheese and jalapeño mixture evenly and stuff each chicken breast pocket with the filling. Use toothpicks to secure if necessary.
In a shallow bowl, whisk together the eggs and water.
In another shallow bowl, combine the panko breadcrumbs and grated Parmesan cheese.
Dip each stuffed chicken breast first into the egg mixture, allowing excess to drip off, then coat thoroughly with the breadcrumb mixture, pressing gently to adhere.
Lightly spray both sides of the coated chicken breasts with cooking spray.
Place the chicken breasts in the air fryer basket in a single layer, making sure they are not touching.
Air fry at 375°F (190°C) for 18-20 minutes, flipping halfway through, until the chicken is cooked through and the coating is golden brown and crispy. The internal temperature should reach 165°F (74°C).
Remove the toothpicks before serving. Let the chicken rest for 3-5 minutes before slicing.