Beat cream cheese, powdered sugar, and vanilla extract in a small bowl until smooth and creamy. Scoop into 12 teaspoon-sized balls, place on a plate, cover, and chill in the fridge.
In a medium bowl, whisk flour, baking powder, salt, cinnamon, and nutmeg (if using).
In a separate large bowl, beat butter and sugar for 2–3 minutes until fluffy. Mix in egg and vanilla. Gradually add dry ingredients and stir until a soft dough forms.
Scoop 1 tablespoon of cookie dough and flatten slightly. Place a cheesecake ball in the center and wrap the dough around it, sealing well.
Roll into a smooth ball. Place on a plate, cover, and chill for 30 minutes.
Preheat oven to 350°F (175°C) and line a baking sheet with parchment. Mix sugar and cinnamon in a small bowl.
Roll each chilled dough ball in the cinnamon-sugar mixture and place 2 inches apart on the baking sheet. Bake for 10–12 minutes until edges are golden but centers remain soft.
Let cookies rest on the baking sheet for 5 minutes before transferring to a wire rack. Serve warm or at room temperature.