Whilst I know nothing of a requirement for ATC directing a go-around, I do about the GPS side of things.
A TSO-C129 GPS (KLN89, KLN90, GNS430 etc) does use mode C input from the transponder. It uses that as a pseudo satellite input (one which is located at the centre of the earth). It uses that to help exclude bad GPS signals, which is a requirement for RAIM (receiver autonomous integrity monitoring).
Without mode-C input to the GPS, RAIM will not be available, and your GPS will not go 'active' during an approach.
This may change with TSO-145 kit (such as the GNS430W)
Bevan..