So there used to be this ambiguous rule:
You can bash an opponent with a shield, using it as an off-hand weapon.
As gatherer818 reports, the bolded section was removed in an errata. This is good, as it clarifies how the rule works. However, despite this statement, you could use a heavy shield two-handed even before the errata. Here’s why:
There is no such thing as an “off-hand weapon” under the general rules
The two-weapon fighting special combat option refers to “attacks made with the off hand” which is the closest the rules ever come to using the term. Even there, it is in a specific case, not a general purpose rule.
If you are not using the two-weapon fighting special combat option, you do not have an “off hand.” It is not a general term applied in the rules.
As such, the phrase “as an off-hand weapon” is descriptive
The rules text for Pathfinder is a mix of description – statements which illustrate how things are used – and proscription – rules, requirements, and limitations on actions. It can sometimes be difficult to tell the two apart; this is something that some rules systems (D&D 4E, Legend) endeavor to correct, while others (most notably rules-light systems) embrace by doing away with proscription altogether, but there are nonetheless a lot of systems, like Pathfinder, that use a mix of the two.
Since “off-hand weapon” is not a game-term, and the phrase is used in an introductory sentence for a special combat option, it is being used descriptively – how the author expects you’ll want to use it. The original author of the line, which also existed in 3.5, even explicitly stated this fact. (link pending)
Attempting to read the line proscriptively makes no sense
Both from game balance and verisimilitude perspectives, claiming that a shield can never be a primary weapon makes no sense. This has nothing to do with two-handing the shield at this point, it’s about using the shield as a one-handed weapon, rather than forcing it to be the light one (or worse, a one-handed weapon used as the off hand attack in two-weapon fighting, accruing substantial penalties)
Game Balance
Heavy shields are one-handed weapons when used to shield bash. As such, they have to be the primary weapon, or else you take large penalties in the one case where “off hand” is even mentioned in the rules – two-weapon fighting. To effectively use a heavy shield as a weapon while dual-wielding, you must be using it as your main hand, and a light weapon as your other weapon.
Verisimilitude
Which perfectly describes the combat style of the Roman legions. Seriously, the primary melee armament of Roman legionaires was a large, heavy shield, and a small, stout gladius – a short sword. The style is more effective when you have an organized formation, of course, but that doesn’t mean it suddenly become physically impossible without that. A Roman legionaire cut off from the legion and forced to fight on his own would still fight that way, because guess what – those are the weapons he’s got, and that’s the style he’s been trained in. And while it might not be ideal, it’ll still work pretty well.
Shields make fine bashing implements, particularly when they’re heavy, which they often are. Their reach leaves something to be desired, and it can make it difficult to use the shield for its primary purpose, but it still works just fine.
Two-handing the shield is therefore allowed under the rules, and also can make sense
Imagine a big, heavy shield strapped to your left arm. You can hold it up to block things, swat at guys a bit with it, but what do you do if you really want to bash someone with it, say if your primary weapon’s been knocked out of your hand?
You’d grab your left fist or wrist with your right hand, and swing with both together, putting your whole weight behind the blow. Certainly seems to justify tacking half your Strength onto the damage to me!
And I’m certain there is ample illustration of this technique from Captain America comics or movies; I’ll try to dig those up tomorrow when I get a chance. For that matter, consider Captain America: he usually fights with a shield on his arm, and no other weapon. He’ll punch with his fist, certainly, but he also fights with the shield. It’s iconic. His fighting style is often very much shield as primary weapon, fist as the off-hand, secondary weapon. Sometimes putting a little more oomph into the shield bash is worth not getting to punch.
I agree with your interpretation, no matter the number of allies, you only get +2 to your Shield bonus to AC.
Benefit: When you and an adjacent ally are each using a shield, your shield bonus to Armor Class increases by 2.
I read an here as at least one. Nothing in the feat explicitly calls out that it might scale.
Feats that have scaling bonuses generally have a much more specific wording. For example looking at (first find on Internet) Teamwork Benefits:
Flanking Enhancement
Your team coordinates its attacks with great precision when surrounding a foe, gaining benefits beyond those of standard flanking maneuvers.
Benefit: Your benefits increase based on the number of "flanking pairs" attack the same foe. If you have 2 pairs of flankers on a single foe, all 3 of you gain the +4 to hit instead of the standard +2. If you have 3 or more flankers the bonus increases to +6.
Another example, from the War Master's Charge maneuver (Tome of Battle):
As part of this maneuver, you charge an opponent. [...] For each ally who charges, counting yourself, your charge attack and those of your allies are made with a cumulative +2 bonus (in addition to the normal bonus provided by charging). [...]
This for each is fairly typical in my experience.
Out of RAW or RAI, I would imagine that the bonus could scale pretty high, with finely packed creatures... at the same time though, Shield Bonuses to AC do not count against Touch AC by default and do not protect against magical attack, and a dense pack of creatures is a juicy target for an area attack.
Best Answer
The rules for Cover, Dodge and trivial shields should be enough
Before introducing new mechanics and homebrew new items, answer these three questions:
If there is no specific problem to solve, and you just don't know how to resolve a thing that your player has just announced, PBH page 6 "How to play" proposes the "fiction first" approach:
When your player says "I use X as an improvised shield", and you don't know how to resolve this, because there are no rules for improvised shields in 5e, apply this "fiction first" approach. What this player are trying to achieve and how? Then use the common sense and existing rules to adjudicate the situation.
Use Cover mechanics when the player announces "I freeze some water and hide behind it", this improvised shield is called "cover". Hiding behind something big enough gives you bonus your AC and saving throws:
They even can carry this obstacle with them, providing it is light enough, but picking it up and setting in the same turn should probably expend their action.
Use Dodge mechanics when the player announces "I'm desperately trying to avoid being hit, using any suitable thing around as a shield". This sounds as the perfect opportunity for the Dodge action. Resolve this using the Dodge mechanics:
Last thing — if your players want to use something in an unusual way, and you are not sure how to homebrew this, just "reskin" an existing item. At least, this does not break anything.
Use shield mechanics when a player found a perfect shield equivalent and wants to use it as an improvised shield. Just use rules for a normal shield in this case: +2 AC, needs an action do don, occupies a hand.
Nothing. Is it a bad thing? Why? Characters will find gold in their adventures anyways, and a shield costs only 10gp. Giving a "free" shield isn't worse than giving free 10gp, and normally you buy a shield just once. A knight using utensil in an unusual way could be more interesting than one with a "proper" shop-bought armor.