Higher flap settings produce more drag increase than lift increase.
On go-around reducing flaps from full to an intermediate config will greatly reduce drag without much lift penalty - thus increasing climb performance.
At the same time, approach speed should be sufficient to fly with reduced flap setting.
If you end up with speed waay below Vref, it’s prudent to keep landing config until speed above Vref. At the same time, you should avoid getting into this state in the first place...