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Add water, yeast, and 1 tsp of granulated white sugar to a small measuring cup. Stir and set aside for 10 minutes, until the yeast has bloomed.
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Add bread flour, remaining granulated sugar, and salt to a large bowl. Mix until combined. Add yeast mixture, milk, and 3 Tablespoons of softened butter and mix until combined. Use your hands to clump the dough together and place on a lightly floured surface. Knead the dough for 8-10 minutes until smooth. You could also use a stand mixer for this step.
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Place dough in a greased bowl, cover with plastic wrap, and allow it to proof in a warm area until it’s almost double in size, about 1 – 1 ½ hours.
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Meanwhile, line the bottom of the air fryer basket with parchment paper. DO NOT turn on the air fryer at this time. Place dough on lightly floured surface and cut dough into 12 equal pieces. Roll each piece into a roll and place them in the lined air fryer basket next to each other, with the sides touching. Close the air fryer. DO NOT start the air fryer at this time. Allow the rolls to rise again for 45 minutes to 1 hour in the closed air fryer that is off.
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When ready to air fry, turn on the air fryer and set the temperature to 300 degrees Fahrenheit and bake for 15-18 minutes until the rolls are done, and golden on top.
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Brush the rolls with the remaining butter and sprinkle with coarse kosher salt or sea salt if desired. Enjoy.