Amazon API Gateway has a hard integration timeout that determines how long it waits for a backend response. If the backend (Lambda) does not respond within this time, API Gateway returns an HTTP 504 error to the client.

In this scenario, the Lambda function timeout is longer (20 seconds) than the API Gateway integration timeout (15 seconds). AWS documentation states that API Gateway will terminate the request once its timeout is exceeded, even if Lambda continues executing successfully. This explains why there are no Lambda errors despite 504 responses.

Increasing the Lambda timeout (Option B) does not help because API Gateway times out first. Reserved concurrency (Option A) and throttling limits (Option D) are unrelated to request duration.

The correct solution is to increase the API Gateway integration timeout so that it exceeds the maximum expected Lambda execution time. This ensures API Gateway waits long enough for the Lambda response.

Therefore, increasing the API Gateway timeout prevents HTTP 504 errors.