I think many people here are not considering the scenario where, after an engine failure, a decision has been made to remain in the circuit for an immediate return to land. (Obviously this assumes that there are no known complications like being significantly overweight, other system failures, and perhaps a very inexperienced crew member ?) The minimum flap setting for joining the (standard single engine) circuit is Flap 1 going to Flap 5 so IMHO there is very little point in retracting flaps to less than 1 and then almost immediately extending them again.
I instruct on the 737 and often see crews getting so involved with checks whilst downwind in the circuit they forget they are still at Flaps Up speed (c. 210-220) and I end up having to freeze the simulator to prevent them ending up in the next country/county! It is usually best to fly the circuit at standard speeds and this gives an average competent crew time to get the QRH OEI c/l done ,a Flap 15 bug set, and a quick brief before turning base. In the event that a decision is made to join a holding pattern then obviously the aircraft is better in the clean configuration. It all comes down to "airmanship"-- Boeing's standard patterns are for guidance but as the A380 incident showed often crews need to think a "bit outside the box"-- i.e. be a bit flexible and use common sense.