Stir 1/2 cup water and gelatin together until gelatin dissolves.
Bring corn syrup, sugar, and 1/3 cup water to a boil in a saucepan over medium-high heat. Heat to 240 degrees F (115 degrees C), or until a small amount of syrup dropped into cold water forms a soft ball that flattens when removed from the water and placed on a flat surface. Stir vanilla and gelatin mixture into corn syrup mixture; cool slightly, about 10 minutes.
Beat egg whites in a glass or metal bowl until stiff peaks form. Lift your beater or whisk straight up: the egg whites will form sharp peaks. Slowly drizzle syrup mixture into egg whites and beat until mixture forms soft peaks. Turn marshmallow out onto parchment paper or parchment-lined sheet pans and allow to set least 8 hours or overnight. (See Editor's Note.)
Sprinkle another sheet of parchment paper with confectioners' sugar and place marshmallow, paper-side up, onto confectioners' sugar. Loosen the marshmallow from the parchment paper by wetting the paper on the back. Cut out marshmallows using cookie cutters dipped in water or sprayed with cooking spray.
If you like, divide mixture into separate bowls in Step 3 and add desired food color before transferring to sheet pans. You may use a liberal dusting of cornstarch and confectioners' sugar (about 1/2 cup of each, sifted together) to keep the marshmallow mixture from sticking.
Spray holiday cookie cutters with cooking spray before cutting shapes.