If using an old 240v cable to make two 120v circuits, is there a risk of overheating the shared neutral return?
Actually, it would result in a net 0 A on the neutral. So this actually can work quite well and is called a Multiwire Branch Circuit or MWBC.
The one catch is that the breakers powering the circuit need to be set up for common shutoff - i.e., if you turn off one, you always turn off the other. If the breakers are actually set up for common trip, which is normally the case for a 240V circuit like a stove or dryer, then that provides common shutoff as well.