Time-domain reflectometry (TDR) can help observe the initiation and evolution of localized shear planes in both rock and soil slopes, and has temporal and spatial resolutions suitable for landslide monitoring. An improved and standardized technical guide for TDR cable installation and data interpretation is needed to utilize it better. TDR technique involves sending an electromagnetic pulse into a coaxial cable grouted in a pre-drilled borehole, and capturing the reflected signal from cable deformity, which is triggered by the localized shear deformation in the underground. This study developed a large direct shear box for testing TDR responses in various cable-grout-ground assemblies, in order to reliably model the cable-grout-ground interaction at the localized shear. Different combinations of cable type, grout condition, soil type, and shear bandwidth were tested using the new physical model to re-examine TDR's response to ground deformation in sliding mode. The results revealed some misconceptions in previous studies that used cable-grout assemblies without considering the entire interaction with the ground. The implications of the experimental results are carefully considered and new technical recommendations are provided for cable installation and data interpretation to foster the improved use of TDR. A new data reduction method that involves data filtering, differential waveform, and three-sigma rule is proposed to support the recommended installation setup for robust early detection of a localized shear plane.