The bottle and the water in it are physically connected by tubing right into the patient's airways. Infection is definitely possible.

Most hospitals have access to an autoclave ! It seems trivial to sterilize the bottles

Hospital-acquired infection is common enough.

In USA the large companies who will lose profits from simple alternatives will make up reasons to not lose their profits.

From an article without a paywall:

https://www.bbc.com/news/business-40498395

Basically, they don't have access to ventilators. The current recommendation still has a mortality rate of 1:7 but the bottle method seems to be around 1:56 (if I'm reading that right).

So, the order of preference is ventilator, shampoo bottle, then low-flow oxygen. In other words, what I said. This is a case of not having access to the best method, but having something that works better than the other secondary methods.

This will not and should not replace ventilators in modern hospitals, but in places where ventilators are unavailable, this is a good solution.

What about in the EU?