Sprinkle the yeast over the warm water in a small bowl. The water should be no more than 40 degrees C. Let stand for 5 minutes until the yeast softens and begins to form a creamy foam. In a large bowl, mix the warm milk, sugar and salt and mix to dissolve. Pour the yeast mixture into the milk mixture and stir to combine.
Beat in the butter, eggs and flour until the mixture forms a smooth, soft dough. Cover the bowl and let rise until doubled in bulk, about 30 minutes. Stir the dough well, cover and let rise 30 more minutes.
Mix honey and 125ml of water in a saucepan, bring to the boil over medium-high heat. Turn off the heat and let the honey syrup cool.
Heat oil in a deep-fat fryer or large saucepan to 180 degrees C. Oil should be about 5cm deep.
Place a large table or soup spoon in a glass of water near the batter. Scoop up about 2 tablespoons of 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 the dough balls into the hot oil in batches, wetting the spoon each time you make a dough ball. Fry in the hot oil until golden brown on the bottom and roll them over to cook the other side, 2 to 3 minutes per batch. Gently set the loukoumades aside to drain on kitchen towels.
Place the loukoumades on a baking tray, drizzle them with honey syrup and sprinkle with cinnamon. Serve warm.