Sprinkle yeast over 1 cup warm water in a small bowl. Let stand until yeast softens and begins to form a creamy foam, about 5 minutes.

Mix together warm milk, sugar, and salt in a large bowl until sugar and salt are dissolved. Pour in yeast mixture and stir to combine.

Beat in flour, eggs, and butter until mixture forms a smooth, soft dough. Cover the bowl and let rise at room temperature until doubled in volume, about 30 minutes. Stir dough well, cover, and let rise again for 30 more minutes.

Meanwhile, mix together honey and 1/2 cup water in a small saucepan; bring to a boil over medium-high heat. Turn off the heat and allow honey syrup to cool.

Heat 2 inches oil in a deep fryer or large saucepan to 350 degrees F (175 degrees C).

Place a large serving or soup spoon in a glass of water near dough. Scoop up about 2 tablespoons dough per puff with the wet spoon, drop it into the wet palm of your hand, and roll it back into the spoon to create a round shape. Do not overhandle the puffy, soft dough.

Drop dough balls into hot oil in batches, wetting the spoon each time you make a dough ball. Fry in hot oil until golden brown on the bottom, then roll them over to cook the other side, 2 to 3 minutes per batch. Gently set loukoumades aside to drain on a paper towel-lined plate.

Place loukoumades on a baking sheet. Drizzle with honey syrup and sprinkle with cinnamon. Serve warm.