So, without load, D3 have to dissipate all the inductive + mechanical energy of the motor that isn't dissipated in the motor windings, when you turn the motor off.
That is not what is going to happen. Why would it? Assuming a permanent magnetized motor:
The transistor stops conducting, the current commutates to the diode and current drops to zero while magnetic energy is converted to mechanical energy at a rate determined by motor inductance and its induced EMF (and the diode voltage drop adds in there too). At the end, the current has dropped to zero, the diode stops conducting and that's the end of it.
Energy could in the general case be returned to the source through the reverse diode of the transistor at a voltage which is below the EMF of the motor, but that can't happen here because of the diodes in the source bridge rectifier. If the motor is of the series wound type, no significant mechanical energy can be returned to the electrical side without reversing the field polarity regardless of that even.
What is usually required is for the freewheeling diode to be able to take the full expected motor current continuously, unless rated torque is not needed at low speed. So it needs to be able to handle at least 17 A. The diode should also be a fast type (which the 1N540x is not) so that reverse-recovery losses will be under control.
Care may also needed to make the power source a low impedance. With the current configuration, energy stored in the quite high parasitic inductance of the source (power line, transformer leakage inductance, wiring, etc.) will cause high voltage spikes each time the transistor switches off, bringing the transistor (or some other component) into avalanche dissipating that energy in it.
Capacitive smoothing on the output of the bridge rectifier is one way of solving that problem.
But your switching frequency doesn't seem to be much higher than 100 Hz. Why such a low frequency? Without knowing your exact motor parameters it's impossible to say for sure, but the current waveform is likely to be highly unfavorable, deep into discontinuous current mode, generating high losses.