'Principal-protected' notes promise to return your original investment, but that promise comes with conditions investors are rarely told about plainly. Protection typically applies only if you hold to maturity, and only to the extent the issuing bank remains solvent. A principal-protected note is an unsecured obligation of the issuer — if the issuer fails, the protection can fail with it.
The 2023 collapse of Credit Suisse is the cautionary tale: roughly $17 billion of the bank's complex 'additional tier 1' instruments were written down to zero overnight. Those particular instruments were bank-capital securities rather than retail principal-protected notes, but the lesson regulators keep emphasizing is the same — a reassuring label does not remove issuer and structure risk.
If you were sold a 'protected' product as a safe, CD-like investment and lost money anyway, the gap between what you were told and what you bought may be the basis for a claim.