My grand piano had a stuck key. The dealer sent a person over to the home who used a tool to squeeze the bushing felt. This resolved the problem, but the key now has more play left and right than the other keys around it. Did he ruin the bushings in the key by squeezing the felt? IF so, what are the consequences of ruined bushings? Forgive my layman's ignorance.

Yes, the tech squeezed the bushing too much. This may result in some lost energy going to the string and a slightly "disconnected" feel. It is ok if the key moves side to side. If you hear noise as you move it side to side, there is too much slack. The pin is oval so you can turn it and take out the slack if it bothers you. The tech may come back and do that free of charge. Or just use an adjustable wrench (no teeth so won't scratch pin). Better yet, use some thin cloth between the wrench and the pin, just to be sure not to scratch it. A scratched pin will just wear away the felt prematurely.
Hope that helps.

It's likely not so much the bushing itself as it is the wood that the bushing is glued to. If too much pressure is applied, the wood gets crushed, and then there is too much play. This is reversible by any of several methods: 1. the bushings can be steamed and then resized 2. you can replace the bushing with thicker felt and resize 3. apply VS Profelt to affected bushings with sizing caul in the hole. Simply turning the key pin is an unacceptable fix for the long term, IMO.

Or the bushings can be needled.

When the mortise if over-squeezed, it is possible to massage the wood on the part of the mortise facing the keyframe front rail and thereby get the wood inside the mortise to bulge back out.

I learned this technique at Yamaha's Little Red Schoolhouse many years ago. It is essential to have a technique for correcting an excess squeeze. Otherwise, it's just like only being able to increase tension but not reduce it when tuning. You have to know how to go both ways.

Greetings,
Yes, you had a clumsy tech, or a great one on a bad day, who knows?
Turning the front pin will take up some of the slack, and for the first 4 or 5 degrees, doesn't lose any surface area. If you have to turn the pin further than that, you will begin using just the outer edges of the pin and wear will accelerate due to too little area bearing the load.

As mentioned, a needle into the wood behind the bushing is good for .005-.010", you can do this on both sides, (well, the guy who screwed up the mortise should do it on both sides). When I have had to do this, I use a large pin to make the hole and a small toothpick to pack some thin glue in it. It works, but I don't like it.

Some of the softest mortises I have seen have been in the Pratt Read key sets of the 1960's. Even in high end pianos, the wood seemed like the softest sugar pine, and every now and then the mortise would just collapse as the bushing was eased. This overdoing it can best be avoided if I think speed rather than force when squeezing. I have messed up enough keys in my lifetime so that now I think "Sloooww" every time I pick up my easing pliars.
I will add that since I began using oversized felt with cauls and VS Pro-felt, I rarely touch the easing pliers.
Regards,

Is the key bushing tightening tool no longer recommended?

Thanks to all. However, how can I tell if the movement from side to side is excessive as oppose to being within an acceptable range? I can hear a small clicking noise when moving from side to side, but it doesn't seem to affect playing.

On rare occasion, after a key has been eased the bushing can become dislodged (e.g. from either incomplete glue coverage to start with or in the case of an older instrument, brittleness) in which case the key itself may not have been over-eased at all. I've even seen bushing cloth fall out completely. What you are hearing could be symptomatic of this and the tech will know one way or the other when he checks it for you.