Re: JSON_VALUE() behavior when RETURNING bytea (expected base64 decoding)

It looks like your bytea_output is set to 'escape', which would explain what you are seeing. Try adding this in first:

SET bytea_output = hex;

SELECT JSON_VALUE(jsonb '"AQID"', '$' RETURNING bytea);

That (hex) is the default value, so you must be setting it to escape somewhere. You can see where by running:

select * from pg_settings where name = 'bytea_output';

Examine the source, sourcefile, and sourceline columns 

I personally prefer hex, but perhaps it's set to octet in your system for a reason. If not, maybe change it globally?

Cheers,