Pat the chicken strips dry with paper towels so the seasoning sticks well.

Slice peppers and onion into uniform strips (about 1/2-inch) so they cook evenly.

In a large bowl or resealable bag, combine olive oil, lime juice, chili powder, smoked paprika, cumin, garlic powder, onion powder, oregano, salt, pepper, and cayenne if using. Toss chicken strips in the marinade until evenly coated. Let sit for 10-30 minutes at room temperature, or up to 2 hours in the fridge.

Preheat the air fryer to 380°F (193°C) for 3-5 minutes.

Place chicken in a single layer in the air fryer basket; avoid stacking. Cook for 6-8 minutes, shaking or flipping halfway through, until edges begin to brown and the internal temperature hits 165°F (74°C). Transfer cooked chicken to a plate and tent with foil to keep warm.

For peppers and onions, toss with a teaspoon of oil and a pinch of salt. Air-fry at 380°F for 6-8 minutes, shaking the basket halfway, until veggies are slightly charred at the edges but still crisp-tender.

Return chicken to the basket with the veggies for 1-2 minutes to marry flavors, or toss everything together in the bowl with a squeeze of fresh lime and chopped cilantro.

Warm tortillas in the air fryer for 30-45 seconds (wrapped in foil) or on a hot skillet for a short time.

Pile chicken and peppers on warmed tortillas and top with avocado, salsa, sour cream, and cilantro. Serve with lime wedges.