I have a handmade recurve, had it for many years, I recently replaced the string and the brace height seems very low, slightly over 7" and the feathers are hitting the rest. Recurve is 58" new string is 54" and I twisted it as much as I dare.  I know there is no right answer, but do I go with a shorter string or play it safe.  It shoots as well as I can shoot it right now, but I dont remember it being this low from when I shot it all the time when I was younger.

I don't see any reason not to try a slightly shorter string

Rule of thumb for recurve brace height is bow length X .13, which would give you an estimate of 7 1/2".  So you should be safe in moving it up some from 7".

What doesn't compute is why you should have to twist the new string so much to get to 7".  I suspect the bow is either shorter than 58", or the string is longer than 54".  If you're basing the bow length on the length it is marked, you might want to measure it, because bowyers tend to mark their bows at the closest AMO length to what it actually is.  In other words, 58-60-62, etc, rather than 57" or whatever it actually is.

This bow was camouflaged by my father before he gave it to me, and I've removed some paint but have yet to find markings. I measured it in the most common online method, then measured the old string, and ordered a brand new one from a well known store.  After I saw how low (brace height) it was I twisted it to get what I could, so yes, maybe I should remeasure the bow, then check the string length. The old one was so bad I didn't dare restring it and had thrown it out before the new one arrived.

I'd heard a recurve starting brace height is 1/8th of the AMO.  Works out close to McxDave's suggestion.  (0.13 vs 0.125)

When I order an AMO string with the standard -3", or -4", I'm always pushing the limit for too many twists.  So I finally built a jig, and followed the instructions...so now I too can build strings that are too long,  .
I ended up moving the 2 pins at the corner about 1/8" each (shorter), seems to be ok now.  It took a few tries, It might have been better to take an untwisted string and see what kind of length changes you get with # of twists vs string length.

Yes, that's the answer.  And then make notes of your jig settings, number of strands, loop sizes, etc, for every string you build.  Pretty soon, you'll start hitting them on the nose.

Can't offer anything more but would like to see a pic of the bow. Just curious, hand made and sounds like it's pretty old.