In the design of a cantilever sheet pile cofferdam for narrow excavation, how is stability of the sheets analyzed due to the fact the passive failure wedges intersect?
Intersection of the passive wedges is not an issue, other than being a conservative factor. Soil in a passive wedge is being compressed. Equal compression forces from the two parallel cantilever sheet pile walls just confine the soil horizontally, without increasing the pressure. The closer the walls, the more conservative this interaction. See my sketch below: