I reran the simulation with a 10 µH inductor and got the following:
which seems indicative of behaviour similar to reverse recovery in a diode, maybe the body diode itself, but I don't think the conditions are correct for that. I think it's the MOSFET itself...though the same thing also appears with a BJT. That said, I'm a little suspicious that the slope matches the inductor charge slope, but I guess it's not surprising it matches since it is a current spike that must flow through the inductor regardless even if it is the transistor that is responsible.
100 ohms, 10 µH:
10 ohms, 10 µH:
It appears you were unlucky in that you chose a frequency and inductance too high so the current never had enough time to build up and stayed at a magnitude similar to the reverse recovery spike and everything bled together. Here is your simulation at 7 mH with a much lower frequency:
I did just simulate using switches instead of transistors and it does not exhibit an undershoot. The model for the switch assigned to the "SW" component was:
.model MYSW SW(Ron=1 Roff=1Meg Vt=.5 Vh=-.4)
via the Spice directive, as per LTspice: Voltage Controlled Switches.
With 10 µH, adding 200 pF Cds and Cgs to the switch produces the following waveform which roughly resembles what you have so maybe it's not reverse recovery anything, but just parasitic capacitances, but it doesn't look like ringing as much as I thought it would:
NO LONGER RELEVANT:
An inductor has two modes: As a load, when a source is pumping current through it, it stores energy in its magnetic field. While this happens, the inductor voltage resists the source voltage. This is the back-EMF. In your posted circuit, that is when the switch is closed, the current flows clockwise and the inductor voltage is + on top, - on bottom.
The second mode is when the inductor is the source itself and this happens when the external source driving current through the inductor is decreased (or in extreme cases, removed/interrupted). When this happens, the inductor magnetic field collapses and the energy is released. The inductor uses this energy to try and maintain the current through itself (not the circuit) at the same level. Now, the inductor acts as a source. The inductor voltage is now - on top and + on the bottom. Just as if it were a battery. This is the forward-EMF. Current continues to flow clock wise.
The MOSFET tries to open, but the collapsing magnetic field in the inductor generates whatever voltage is necessary to punch through in order to keep current at the remaining level. There is only finite energy so it can’t keep this up forever and current decreases as energy runs out. But the higher the impedance present, the higher the voltage required, the more power is required, the faster the energy in the magnetic field is expended, and the faster the current falls to zero. The inductor forces the MOSFET to enter breakdown between source-drain in the above circuit to keep current flowing.
At no point does current reverse and flow counter clockwise. The inductor voltage is the only thing that reverses when the inductor goes from having it's magnetic field built up/charged to having its magnetic field collapse/expended, but the current continues clockwise the entire time.
The MOSFET has a parasitic body diode, but it is not a flyback diode. In some circuits (like an H-bridge) it can serve the role of a flyback diode, but in your schematic it is not in the correct position to act as one. A true flyback diode gives the current through the inductor a lower impedance path to circulate in a loop through the inductor so that the voltage spike generated by the inductor is not as high and thus not as damaging. In your circuit, that would be a diode placed anti-parallel to the inductor. This works because the inductor only tries to maintain current flowing through itself, not the circuit loop. The current through the MOSFET can drop to zero near instantly, but as long as the current can find it's way around through the inductor, that's all it the inductor cares about.
Does that clear things up?
The current is much like a moving freight train. You can have the engine producing a force that pushes the train along. But throw up a wall to try and stop the train and that train will produce an enormous force via its momentum and inertia to smash through that wall to try and keep the train going at the same speed. It does this even if you cut the engine and it does this even if the force produce by the engine was not enough to push through the wall on its own (i.e. starting from zero speed and just accelerating up against the wall), similar to how the flyback voltage can be much higher than the source voltage.