In a small bowl, combine buttermilk (or milk with lemon juice) and allow it to sit for 5 minutes.
Peel the onions, then carefully slice off the tops and bottoms to create a stable base, making vertical cuts to form petal-like blooms.
In a separate bowl, mix together flour, paprika, garlic powder, onion powder, cayenne, salt, and pepper.
Dip each onion into the buttermilk mixture, letting any excess drip away, and coat thoroughly in the seasoned flour.
Set your air fryer to 380°F (190°C) and let it preheat for 5 minutes.
Place the coated onions in the air fryer basket, leaving space for proper air circulation.
Lightly spray the tops of the onions with cooking spray or brush them with oil.
Cook the onions in the air fryer for 10-12 minutes, shaking the basket halfway through.
Mix mayonnaise, ketchup, horseradish sauce, lemon juice, and seasonings to taste for a dipping sauce.
Serve the warm onions alongside the dipping sauce.