Where I learnt to fly and where I teach
The flaps must be in the 0 degree setting in the C172/PA28 because you would generally not be doing a short field take off from the touch and go because that normally requires power application before brake release - which would normally make it fall into the normal takeoff configuration for which flaps is 0 deg in the C172/PA28.
Only when the flaps are up and the trim has been set for take off, and then sufficient runway do you apply full power, otherwise you abort.
During my CPL training there was a fatal accident at the school I was training at - and one of the "possible" contributing factors was that the flaps didn't raise all the way during a touch and go (which the student hadn't be authorised to complete) when they got airbourne the aircraft wasn't climbing so the student carried on pitching up to try and achieve a positive rate of climb. Many factors went into the accident as always but unfortunately for all involved we'll never know.