Tungsten heavy alloys (WHAs) are widely used in the preparation of kinetic penetrators. However, the penetrating performance of alloys, measured by the “self-sharpening effect”, is often limited by the low sensitivity of the adiabatic shear band (ASB). To address this issue, the 90W–7Ni–3Fe rods with deformation degrees of 20% and 40% were prepared by rotary swaging (RS) at high strain rates (4000 s−1 and 6000 s−1, respectively). The deformation and ASB behavior of RS-treated alloys were compared to those of undeformed samples. According to the results, RS pretreatment significantly increased the dynamic penetration strength and ASB sensitivity of the alloys. Besides, the characterization of the recrystallized microstructure within ASB and the calculation of the adiabatic temperature rise indicated that microstructure softening could be the primary cause for the initiation of ASB, which was consistent with the rotational dynamic recrystallization (RDR) mechanism. Moreover, the higher strain energy of the 40% RS deformation sample with high densities of dislocations and twins promoted the subgrain rotation and RDR initiation, providing a recrystallization prerequisite for the propagation and proliferation of ASB. The recrystallized twins formed after the completion of the RDR in the 40% RS deformation sample in order to adapt to the reloading impeded the movement of dislocations, which became a stress concentration site promoting microdamage more likely to nucleate and expand, making the ASB more prone to fracture. Therefore, this study is of great significance for the development of self-sharpening WHA kinetic penetrators.