Heat air fryer to 390 F.
To make potatoes: In a shallow bowl, combine flour, salt, garlic powder and pepper. Whisk in milk until smooth.
Place panko in a separate shallow bowl.
Working in batches, coat potatoes in batter then toss in panko until fully coated.
Place potatoes in the air fryer and cook 24 minutes, flipping halfway.
To make chimichurri: In a blender, blend cilantro, parsley, lime juice, honey, salt, pepper, chili flakes and canola oil until smooth.
Serve potato nuggets with chimichurri.