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# Type of request: This is a ...

[ ] bug report
[x] feature request

# Detailed description

The API Gateway response body only accepts strings. To transfer binary data, it needs to be base64 encoded, inserted as a string in the response body and the flag ´isBase64Encoded´ must be set. Once this is done API Gateway will base64 decode the response and return the binary content to the requester.

## Expected behavior

When setting the isBase64Encoded flag, the response is base64 decoded before being returned from API Gateway.

## Actual behavior

Setting the isBase64Encoded flag has no effect, the response body will contain the base64 encoded string instead of binary data.

# Steps to reproduce

## Command used to start LocalStack

Docker compose config:
```
version: '2.1'

services:
  docker-host:
    image: qoomon/docker-host:2.5.0
    cap_add: [ 'NET_ADMIN', 'NET_RAW' ]
    mem_limit: 20M
    restart: on-failure
  localstack:
    image: localstack/localstack:0.12.10
    depends_on: [ docker-host ]
    ports:
      - "4566:4566"
      - "4571:4571"
    environment:
      - DOCKER_HOST=unix:///var/run/docker.sock
      - HOST_TMP_FOLDER=${TMPDIR}
      - DATA_DIR=${TMPDIR}/data
      - DEFAULT_REGION=eu-west-1
      - LAMBDA_REMOTE_DOCKER=0
      - LAMBDA_EXECUTOR=docker-reuse
      - LAMBDA_DOCKER_NETWORK=scripts_default
      - AWS_CBOR_DISABLE=true
    volumes:
      - "${TMPDIR:-/tmp/localstack}:/tmp/localstack"
      - "/var/run/docker.sock:/var/run/docker.sock"

```

## Client code (AWS SDK code snippet, or sequence of "awslocal" commands)

Need to set up a Lambda Rest API that returns a base64 encoded string, where the flag `isBase64Encoded` is set. The returned response should reflect the base64 decoded version of the string.

definition = json.dumps(definition)
        sm_arn = 'arn:aws:states:%s:%s:stateMachine:%s' \
            % (aws_stack.get_region(), TEST_AWS_ACCOUNT_ID, state_machine_name)
        sfn_client.create_state_machine(name=state_machine_name, definition=definition, roleArn=role_arn)
        rest_api = client.create_rest_api(name='test', description='test')
        resources = client.get_resources(restApiId=rest_api['id'])
        client.put_method(
            restApiId=rest_api['id'],
            resourceId=resources['items'][0]['id'],
            httpMethod='POST',
            authorizationType='NONE'
        )
        client.put_integration(
            restApiId=rest_api['id'],
            resourceId=resources['items'][0]['id'],
            httpMethod='POST',
            integrationHttpMethod='POST',
            type='AWS',
            uri='arn:aws:apigateway:%s:states:action/StartExecution' % aws_stack.get_region(),
            requestTemplates={
                'application/json': """
                #set($data = $util.escapeJavaScript($input.json('$')))
                {"input": "$data","stateMachineArn": "%s"}
                """ % sm_arn
            },
        )
        client.create_deployment(restApiId=rest_api['id'], stageName='dev')
        url = gateway_request_url(api_id=rest_api['id'], stage_name='dev', path='/')
        test_data = {'test': 'test-value'}
        resp = requests.post(url, data=json.dumps(test_data))