Shear deformation in commercial magnesium alloys frequently resulted in an additional atypical texture where the basal plane aligned nearly parallel to the extrusion direction, affecting the alloy's mechanical anisotropy. This study prepared AZ31 magnesium alloys with both typical shear texture and atypical texture using a two-stage shear method at 250 °C, 290 °C, and 340 °C. The formation mechanism of the bimodal texture and their relationship with dynamic grain refinement and deformation parameters were comprehensively investigated. While temperature-dependent activation of <c+a> slip usually contributed to the atypical texture, this study identified a {101¯2} twin associated microstructure that reinforced the abnormal texture at lower processing temperature. It was found that the abundant nucleation of the multi-orientation {101¯2} twin bands in the initial stage and their differential slip activations facilitated the evolution of an alternating banded structures characterized by bimodal texture. These microstructures inherited the grain boundary rotation axis of {101¯2} twin and was potentially assimilated into specialized θ[112¯0] symmetric tilt grain boundaries with lower interface energy during continuous shear, stabilizing the bimodal texture. During shear deformation, grain nucleation strengthened the [101¯0]−[112¯0] fibers with bimodal texture by generating ∼30°[0001] grain boundaries through the preferential accumulation of prismatic dislocations. However, more continuous dynamic recrystallization, discontinuous dynamic recrystallization, and micro-shear bands facilitated the nucleation of grains with dispersed basal orientations via dominant non-prismatic dislocations, weakening the overall texture. Besides, the mechanical anisotropy of the alloys was comprehensively influenced by atypical texture and microstructure. At higher deformation temperatures, the reduction in twinning bands and the increase in dynamic recrystallization level relieved the alloy’s tension-compression asymmetry, but deprived its yield strength. This study supplemented the formation mechanisms of bimodal texture during shear deformation, providing valuable insights for optimizing wrought magnesium alloys with superior mechanical properties.