Preheat oven to 320˚F (160˚C). Line a baking sheet with parchment or leave ungreased.
In the bowl of a stand mixer fitted with a paddle attachment or a large bowl, combine the flour and 1/4 cup powdered sugar.
Mix in the butter and vanilla sugar or extract until the butter is absorbed and the dough comes together.
Break off a small piece of dough, a ball a little over an inch wide, and gently form it into a slight diamond. Make a small indention on the top with your thumb and place on the prepared baking sheet. Repeat with remaining dough, placing 1/2 inch apart.
Bake in preheated oven just until the bottoms are barely golden, about 15 minutes. Allow to cool to room temperature on baking sheet.
Place the orange blossom water in a bowl and the powdered sugar in a bag.
Quickly dip a cooled cookie into the orange blossom water, making sure to briefly coat all sides, then immediately cover in the powdered sugar.
Repeat with remaining cookies. Store in an airtight container in the refrigerator for up to a week (the texture is best when allowed to rest at room temperature for 30 minutes before serving). Dust with additional powdered sugar if needed.