Combine yeast, sugar, and ½ cup milk in a bowl of a stand mixer. Let sit for 5-10 minutes, or until the yeast starts to foam or “bloom”. If the yeast does not bloom, you may need to get fresher yeast
Add remaining water, egg, egg yolks, vanilla, honey, butter and salt, mixing on low to combine. Replace the paddle for the dough hook.
Add cinnamon, nutmeg, and flour, one cup at a time, mix on low using the dough hook. Knead the dough until smooth and no longer sticky, adding more flour as needed. Transfer to a clean, oiled bowl. Cover with a clean, damp towel, and let rise until doubled in size, about 1 hour.
Preheat the oven to 350F. Line a baking tray with parchment paper.
Punch down dough to remove any air bubbles, and transfer to a floured surface.
Cut into 8 even pieces. Roll each piece into a rope, flatten and add a small layer of streusel filling, pinch the ends together, and roll into a rope, approximately 12 inches long. Cover with a damp cloth and let rest for 10-15 minutes.
To braid, place two strands in the center of your work surface vertically, lay another 2 horizontally in the center. Weave the center into a square lattice (watch my video!), and cross the “legs” over one another.
Make the egg wash: whisk together egg and water. Brush with egg wash, and top with additional streusel.
Bake for 40 minutes, turning the tray halfway through and brushing with additional egg wash.