Conversion to gaff rig

Yes the area is reduced, but not by much. The top part of a bermuda sail is more effective at producing induced drag rather than lift because the aspect ratio is still far from ideal. So the Gaff or Sprit plan is actually removing the bad parts while keeping the good parts of the sail. The more vertical leech of the Gaff/Sprit and the broad raked head help to reduce the induced drag even with such a low aspect ratio rig. If you notice the mast is nearly half the size of the original and this greatly aids stability and gives lower overall drag that is good for strong wind conditions. I admit that performance might worse in ghosting conditions. Also one cannot simply cut off the mast of a bermuda as the resulting square sail won't set without some form of yard. If you cut the sail from the bottom, leaving a triangular shape, then you get very much reduced area and a far worse aerodynamic plan. (bermuda needs to be tall).

 

Gaff rigs are ancient technology. They were OK for the fabrics and materials available at the time. If you want a square top sail, simply buy a commercially available square top main. This is like arguing what kind of draft horse pulls a cart faster, instead of buying a truck.