What is the correct usage of “deems fit” phrase?

As Mick mentions in his comment, “to deem fit” is a little old-fashioned but not, I think, enough that you shouldn’t learn how to use the idiom. I wouldn’t call it “Victorian” English, as it’s a phrase that sees regular use even today.

This answer by Tom B is the best rephrase of your sentence.

Do whatever you deem fit

Other examples:

Pick whichever person you deem fit for the job.

My path is mine to walk as I deem fit.

This plan of creating an electoral college to select the president was expected to secure the choice by the best citizens of each state, in a tranquil and deliberate way, of the man whom they in their unfettered discretion should deem fittest to be the chief magistrate of the Union.

“Deem” is itself a verb meaning “to judge” or “to consider (in a specified way)”. You can, conceivably, deem anything but it’s a word that is more commonly associated with words like “necessary” or “proper”, or used alone:

It’s clever enough, but the question is whether future generations will deem it “art”.

Jackson spoke, relating all he deemed pertinent.

I am trying to make a point about the fuzzy edges of what has been deemed a “disease”.

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