Combine cream cheese, sugar, and vanilla extract in a mixing bowl. Use a hand mixer on medium speed until smooth, about 2-3 minutes. Scoop into small discs and freeze for at least 1 hour.

Combine diced strawberries and sugar in a saucepan over medium heat. Cook for about 45 minutes, mashing halfway through, until thickened.

Whisk together flour, baking powder, baking soda, and salt. Cream butter and sugar until fluffy, then beat in the egg and vanilla. Gradually add the dry ingredients until just combined.

Scoop cookie dough, flatten slightly, place a cheesecake disc in center, add strawberry jam, and encase filling by rolling into a ball.

Preheat oven to 350°F. Flatten each dough ball into discs, roll in sugar, and bake for 11-12 minutes until edges are golden.

Cool cookies on the baking sheet for 5 minutes, then transfer to a wire rack. Dust with powdered sugar before serving.