When to consider Peak current/voltage vs. RMS current/voltage and vice versa
When manufacturers create power labels for AC electrical devices, what value to they use for the current and voltage? Do they use the RMS of the sine wave?

RMS as that's what will give the measure of heating.

Or do they use the peak of the sine wave?

No.

Is peak current/voltage negligible when considering the safety of an AC circuit?

I think &quot;negligible&quot; isn't the right word here. The peak voltage is the most dangerous part for insulation and personal health.

In general, when trying to determine which devices, or how many devices to plug into a circuit without overloading it, should one consider the RMS current/voltage or peak current/voltage?

RMS.

For example, let's say I am using a power strip that can accept a maximum of 10 amps. I want to plug in two devices which each have a RMS current of 5 amps, but a peak current of 6 amps.

Peak current will be 5√2 amps.

Also the devices accept 120 V, ...

Irrelevant as the current determines the heating.

... but the voltage of the AC current is constantly fluctuating. Why are the devices safe to plug in?

The idea with RMS is that it gives the measure of the equivalent DC current that will cause the same heating effect. Most specifications use RMS for that reason.