Hell yes! I am so excited for this game! I don't mind if it is post Korra or pre-Aang in order to make sure we have Air Benders.
I like the idea of maybe making it a fringe city/town to allow for 'exploration' as well as 'city feel'. Maybe even a city between the Earth Kingdom and the Fire Nation if we want some political intrigue; something like the Village Resort. Post Aang any border city of the United Republic of Nations can work.
I also like the idea of specialized bending being subclasses of their respective schools. I am not sure how you can do that in terms of dice. I like @Roz 's idea of attribute vs skill; and if they want to specialize in a subclass, they may end up sinking most of their skill points in that. This can help even out the skills so you don't have someone who is fantastic at just about everything, plus it matches with the theme of the show; sometimes raw power wins, sometimes finesse wins.
For example, I was thinking the difference between say Zuko and Azula when it came to fire bending. Zuko is obviously much more crafty and has way more nuanced technique than Azula. He is a character who spent most of his firebending points in skills so he has more techniques, tricks, and uses (including redirecting lightening, defensive fire technique, etc). Azula, on the other hand has raw power. She is the character who sinks all her points in the lightning/blue flame subclass, so while she comes out as a wrecking ball, she can't really do much more than that (perhaps a glass cannon of sorts?) Another character would be Combustionman - all his power is in one move, so he becomes a bit of a one-trick pony but really fantastic at it!
I really like the break down of all the bending (in terms of 'moves/tricks' and sub classes) found in the fandom wiki here:https://avatar.fandom.com/wiki/Bending_arts
Hopefully this can help when creating a skill/attribute sheet.
While I may be hated for this, I highly suggest putting a cap on how much a character can learn in terms of bending post chargen, to signal the limit of how much any person can do/learn in a life time. Keep the prodigies for the show. (...On the other hand we can just throw caution to the wind and really have fun in terms of power.)