In a mixing bowl, combine the milk and pickle juice. Whisk together until well mixed. Add the chicken pieces, ensuring they're fully submerged. Cover and marinate in the refrigerator for at least 30 minutes (or up to 4 hours for more flavor).
In another mixing bowl, combine the flour, powdered sugar, paprika, garlic powder, onion powder, salt, black pepper, and baking powder. Mix well to create the breading mixture.
Heat the peanut oil in a frying pan over medium-high heat until it reaches 350°F (175°C). If using a deep fryer, set it to the same temperature.
Remove the chicken pieces from the marinade and allow excess liquid to drip off. Dip each piece into the breading mixture, ensuring it's fully coated. Shake off any excess flour.
Carefully place the coated chicken nuggets into the hot oil, working in batches to avoid overcrowding. Fry for about 3-4 minutes or until golden brown and cooked through, reaching an internal temperature of 165°F (74°C).
Using a slotted spoon or tongs, remove the nuggets and place them on a plate lined with paper towels to drain any excess oil.
Serve the chicken nuggets warm with your favorite dipping sauces.