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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.

result_map['context']['client_context'] = context.client_context
        return result_map
    raw_event_messages = []
    for record in event['Records']:
        
        
        ddb_new_image = deserialize_event(record)
        if MSG_BODY_RAISE_ERROR_FLAG in ddb_new_image.get('data', {}):
            raise Exception('Test exception (this is intentional)')
        
        kinesis_record = {
            'PartitionKey': 'key123',
            'Data': json.dumps(ddb_new_image)
        }
        if MSG_BODY_MESSAGE_TARGET in ddb_new_image.get('data', {}):
            forwarding_target = ddb_new_image['data'][MSG_BODY_MESSAGE_TARGET]
            target_name = forwarding_target.split(':')[-1]
            if forwarding_target.startswith('kinesis:'):
                ddb_new_image['data'][MSG_BODY_MESSAGE_TARGET] = 's3:test_chain_result'
                kinesis_record['Data'] = json.dumps(ddb_new_image['data'])
                forward_event_to_target_stream(kinesis_record, target_name)
            elif forwarding_target.startswith('s3:'):
                s3_client = aws_stack.connect_to_service('s3')
                test_data = to_bytes(json.dumps({'test_data': ddb_new_image['data']['test_data']}))
                s3_client.upload_fileobj(BytesIO(test_data), TEST_BUCKET_NAME, target_name)
        else:
            raw_event_messages.append(kinesis_record)
    
    forward_events(raw_event_messages)
def deserialize_event(event):