Place the sugar-free gelatin powder in a large mixing bowl. Pour in the boiling water and whisk until every granule has dissolved.

Stir in the cold water, then let the gelatin mixture cool for several minutes. It should feel cool but remain liquid and should not begin to set.

Beat the softened cream cheese with 2–4 tablespoons powdered low-carb sweetener and the vanilla extract until completely smooth and creamy. Scrape down the bowl so no firm cream cheese remains around the edges.

Slowly beat the cooled gelatin mixture into the cream cheese mixture. Add it gradually while mixing and scrape the bowl as needed to help prevent lumps.

In a separate bowl, whip the heavy cream to firm peaks. Stop mixing as soon as the cream holds its shape so it stays smooth rather than becoming grainy.

Gently fold the whipped cream into the gelatin-and-cream-cheese mixture until evenly combined. Use a spatula and a light folding motion to preserve as much volume as possible.

Spoon the fluff into serving dishes or transfer it to a covered bowl. Refrigerate for at least 2 hours, preferably 3–4 hours, until light and set.