Raw Base64 or data URI: both work
A data URI already states its type, as in data:image/png;base64,iVBOR... A raw Base64 string doesn't, so the tool recognizes the format from its opening characters: /9j/ is JPEG, iVBOR is PNG, UklGR is WebP, R0lGOD is GIF, PHN2 or PD94 is SVG and Qk is BMP. Anything else is tried as PNG.
Spaces and line breaks are removed before decoding, so strings wrapped across many lines, as they often are in email source or terminal output, can be pasted as they are. Decoding happens in your browser, and nothing you paste is uploaded.
Why a Base64 string won't decode
The most common cause is an incomplete string: a copy that missed the end, or a log that cut a long value short. Extra characters cause trouble too, such as surrounding quotes, a trailing comma from JSON, or escaped slashes written as \/. URL-safe Base64, which uses - and _ instead of + and /, needs converting to standard Base64 first.
If the data is not an image at all, for example a Base64 encoded PDF, there is nothing to preview. In all of these cases the tool says the string doesn't decode to an image rather than offering a broken download.
Where Base64 images turn up
Developers meet them in API responses, database fields, HTML and CSS source, canvas exports and test fixtures. The raw source of an email shows attachments and inline images as long Base64 blocks. Once the preview appears, the panel lists the type, the pixel dimensions and the decoded file size, and Download image saves it with the matching extension.