Combine water, yeast, and 1 teaspoon of the sugar in a bowl, and let stand until foamy, about 10 minutes; set aside. Beat eggs in bowl of a heavy-duty electric stand mixer fitted with a paddle attachment on medium speed until fluffy, about 2 minutes. Add yeast mixture, milk, half and half, butter, salt, and remaining sugar; beat until combined. Gradually add flour; beat until dough is smooth, about 2 minutes. Transfer to a lightly greased bowl, and cover loosely with plastic wrap; let rise in a warm place (80°F to 85°F), free from drafts, until doubled in size, about 1 hour and 30 minutes.
Grease 2 parchment paper–lined baking sheets. On a lightly floured surface, roll dough into a 12-inch square about 1/2 inch thick. Using a knife, cut dough into 2-inch squares; gather and reuse scraps. Place on prepared baking sheets 3 inches apart; cover loosely with plastic wrap, and let stand in a warm place (80°F to 85°F) until doubled in size, about 30 minutes.
Heat 2 inches of oil in a 6-quart saucepan over medium-high to 350°F. Using scissors, cut paper around each malasada, leaving about 1 inch of paper around sides of each. (The paper makes it easier to transfer to frying oil.) Working in batches, place malasadas in hot oil, paper side up, using tongs to peel off and discard paper. Cook until puffed and golden, 2 to 3 minutes, flipping once. Transfer to a wire rack set inside a baking sheet; let cool completely, about 20 minutes. Dip each malasada in Coconut Glaze; serve immediately.
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