Make the Cheesecake Filling: In a mixing bowl, combine cream cheese, sugar, and vanilla extract. Beat until smooth. Scoop into discs and freeze for 1 hour.

Prepare Strawberry Jam: Combine diced strawberries and granulated sugar in a saucepan. Cook for 8-10 minutes until thickened, then cool completely.

Dough Preparation: Whisk together flour, baking powder, baking soda, and salt. Cream butter and sugar, add egg and vanilla, then mix in dry ingredients until just combined.

Combine Jam with Dough: Fold in cooled strawberry jam without fully mixing to create pockets of jam in the dough.

Assemble Cookies: Preheat oven to 350°F. Flatten tablespoon of dough, place a frozen cheesecake disc in the center, and encase it. Roll in sugar.

Bake: Place cookies on a baking sheet and bake for 11-12 minutes until golden around edges. Reshape with a round cutter while warm.

Garnish and Cool: Cool on the baking sheet for 5 minutes, then transfer to a wire rack. Optionally, sprinkle powdered sugar before serving.