It's important to understand that they aren't just regular bonds, they are CoCo (contingent convertible) bonds that exhibit features of both bonds and equity. They all have different contingencies and in the case of Credit Suisse, there were provisions to write them down to zero if the CET1 ratio dropped below 7% or if FINMA says so.
Further reading: Matt Levine's Money Stuff - UBS Got Credit Suisse for Almost Nothing
My questions are:
Does US Companies ( banking/ non- banking ) issue such bonds ?
For the most part no, they're mostly issued by European banks
Are these AT1 bonds same as [junk][3 bonds ?
Not necessarily. Although they pay a high coupon to compensate for the higher risk (most junior debt, in some events junior to common equity) but banks usually have investment grade credit ratings.
How US investors are protected or can protect themselves from these ( other than just selling) ?
Caveat emptor... Understand what you're buying or don't buy them in the first place.
Responding to your edit
So main questions is how Equity holders are getting paid, but not the bond holders. Has the central banks thrown out the risk reward system completely?
Again, no. Investor knew (or should have known) what they were getting themselves into. They didn't complain about the outsized coupon during the good times...
What is questionable is that Switzerland altered its laws to avoid a shareholder vote but that's a separate debate...
Extraordinarily, the deal will not need the approval of shareholders after the Swiss government agreed to change the law to remove any uncertainty about the deal.