In a second large bowl, beat the sugar and butter until the mixture is pale, smooth, and light (about 3 minutes). Add the egg and beat to incorporate, then mix in the vanilla extract fully. Add the dry ingredients and mix until only a few streaks of flour are visible. Add the sprinkles and mix to incorporate fully.
Transfer the cookie dough to a clean working surface. Roll into a 25 cm long log with a diameter of about 5 cm. Wrap in plastic wrap and refrigerate for at least 1 hour (the cookie dough can be kept refrigerated for up to 1 week, or frozen for up to 1 month).
To bake the cookies, preheat the oven to 350°F (175°C). Line a baking sheet with parchment paper.
Cut the cookie dough log into just under 1-cm-thick slices. Transfer the cookies to the prepared baking sheet. Bake for 10 to 11 minutes, or until the cookie dough looks just dry (do not let the cookies bake until golden to preserve the bright colors of the sprinkles). Let the cookies cool completely.
While the cookies cool, bring a pot of water to the boil and prepare the Cotton Candy fondue according to the packaging instructions. Remove the fondue from the boiling water and pat dry. Open the can and stir the fondue to make it super smooth.
Dip half of each cookie into the Cotton Candy fondue and return to the baking sheet. Let rest for 20 minutes to set (you can speed up this process by refrigerating the cookies).
Enjoy the cotton candy sprinkle cookies right away or store in the refrigerator until ready to serve.