Make the marinade by combining 1 cup of the coconut milk, minced garlic, soy sauce, and lime juice in a large resealable bag or airtight container; shake or stir to combine.
Add the chicken strips to the marinade, seal, and refrigerate for at least 3–4 hours (up to 12 hours) so the flavors develop.
Preheat the oven to 400°F (200°C). Line a baking sheet with foil and lightly grease with oil or cooking spray; set aside.
Place the sweetened shredded coconut in a blender or food processor and pulse until coarsely ground (crumb-like); transfer to a bowl and stir in panko, salt, and pepper.
Place the flour in a second shallow bowl and the beaten egg in a third shallow bowl.
Working one piece at a time, remove a chicken strip from the marinade, shake off excess, dredge in flour, dip into the beaten egg, then press into the coconut–panko mixture to coat; place on the prepared baking sheet. Repeat with remaining strips.
Bake the coated chicken for 28–32 minutes, or until the coating is golden and the internal temperature reaches 165°F (74°C).
While the chicken bakes, make the dipping sauce by whisking 1/4 cup coconut milk with mayonnaise, sweet Thai chili sauce, Sriracha, and rice vinegar in a small bowl until smooth.
Serve the baked coconut chicken warm with the prepared dipping sauce.