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This phase II trial studies the side effects and how well Vyxeos works in treating patients with intermediate and high-risk acute myeloid leukemia who have failed an initial cycle of standard cytarabine and daunorubicin chemotherapy. Vyxeos is a combination of both chemotherapy drugs cytarabine and daunorubicin contained in a liposome. Drugs used in chemotherapy, such as cytarabine and daunorubicin, work in different ways to stop the growth of cancer cells, either by killing the cells, by stopping them from dividing, or by stopping them from spreading. Cytarabine and daunorubicin given together in liposomes may have fewer side effects and work better than cytarabine and daunorubicin given alone in patients with acute myeloid leukemia.