In recent years, excessive lateral deformation of subway shield tunnels has been observed due to adjacent engineering activities. This study examines the monitoring of excessive lateral deformation of the shield tunnel and the special steel plate reinforcement process to enhance the safety and stability of the operating subway tunnel structure. It uses a three-dimensional refined finite-element model of the shield tunnel for parametric structural loading simulation analysis to propose a structural deformation limit value suitable for the subway shield tunnel. This study’s findings indicated the following: (1) as observed from the engineering examples, a tunnel with significant elliptical deformation increases the likelihood of cracking and other structural issues in the adjacent subway shield tunnel segment; (2) as observed from the post-reinforcement monitoring data, the steel plate reinforcement method effectively enhances the load-bearing stability of the damaged tunnel structure; (3) based on the finite-element simulation results and the comprehensive review of practical conditions, the standard warning value for lateral deformation, using ellipticity evaluation of the subway shield tunnel, is established at 20‰, with a control value of 25‰. The outcomes of this research offer valuable insights into the operation, maintenance, and health monitoring of subway shield tunnels.