Cut fish filets into 1” catfish pieces, and dry the catfish fillets with paper towels. Place the catfish pieces onto a paper towel-lined plate.
Prepare a dredging station. Add flour and potato starch in one bowl. Combine whisked eggs, garlic paste, and lemon juice in the second bowl. Mix panko bread crumbs, garlic powder, and black pepper in the third small bowl.
Preheat the air fryer to 400 degrees f, for 5 minutes, spray your air fryer basket with olive oil spray, or nonstick cooking spray.
Working in batches of 5-6 fish nuggets at a time, place catfish in the flour bowl until evenly coated, then dip them into the egg mixture, and lastly, roll the fish in the bread crumbs. Lightly press the bread crumbs into the fish to help adhere. Repeat until all fish are breaded.
Lightly spray the air fryer basket with non-stick cooking spray. Arrange fish nuggets in a single layer in the basket and spray them with canola oil. Set the cooking time for 5 minutes, then turn them over and lightly spray them with canola oil, set the cook time for 5 more minutes.
Serve fish nuggets with a side of horseradish dip and lemon wedges.