I have observed a similar accident with two cessnas with one taking off and one going around. In that case the aircraft taking off climbed into the one overshooting.
One scenario is that in this case the 340 realised that he was catching up the 152 and went around. The Cessna also decided to go around and climbed back to circuit height. In such a scenario neither aircraft can easily see the other.
The important point is that if you need to go around with an aircraft climbing out it is important to offset to the right so he doesn’t climb into you.