Cut off the tip of the onion and peel it. Flip it cut side down on a cutting board and start slicing 1/4 inch away from the root. The root should stay attached. Make as many cuts as possible, start with 4 quarter slices and then slice each quarter 3 to 4 times to get similarly sized petals. Set aside.
In a shallow bowl, combine flour, paprika, and ½ tsp salt.
In another shallow bowl combine buttermilk (or milk and vinegar/lemon juice) and the egg, then add ¼ cup of the flour mixture from the first bowl and whisk until smooth.
In a third bowl combine panko breadcrumbs, remaining salt, and olive oil with a fork until the oil is evenly distributed.
Dredge the onion in the flour mixture and make sure it is coated evenly between the petals. Sifting the flour over the onion helps. Shake off excess flour.
Dip the onion in the buttermilk batter and use a spoon or your fingers to coat it evenly.
Place onion in the panko mixture and use your hands or a spoon to get the mixture between the petals.
Place onion in the Air Fryer basket, spray it with oil spray and cover the top with aluminum foil. The air should still be able to circulate around the onion.
Cook at 375°F for 15-20 minutes then remove the foil and air fry until golden brown and crispy, about 3-7 more minutes. Carefully remove onion and serve with dipping sauce.