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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.

if not is_api_key_required:
        return True
    api_key = headers.get('X-API-Key')
    if not api_key:
        return False
    return validate_api_key(api_key, stage)
def update_content_length(response):
    if response and response.content:
        response.headers['Content-Length'] = str(len(response.content))
def apply_request_parameter(integration, path_params):
    request_parameters = integration.get('requestParameters', None)
    uri = integration.get('uri') or integration.get('integrationUri') or ''
    if request_parameters:
        for key in path_params:
            
            request_param_key = f'integration.request.path.{key}'
            request_param_value = f'method.request.path.{key}'
            if request_parameters.get(request_param_key, None) == request_param_value:
                uri = uri.replace(f'{{{key}}}', path_params[key])
    return uri
def apply_template(integration, req_res_type, data, path_params={}, query_params={}, headers={}):
    integration_type = integration.get('type') or integration.get('integrationType')
    if integration_type in ['HTTP', 'AWS']:
        
        template = integration.get('%sTemplates' % req_res_type, {}).get(APPLICATION_JSON)
        if template:
            context = {}
            context['body'] = data
            def _params(name=None):