FYI... I figured out the problem (thanks to Derek Orr for pointing me in the right direction!). For those who are using the OTK with the Docker form-factor of the API Gateway....
The issue is because I am running the OTK test clients and OTK Authorization server on a Docker container. The OTK test client tries to reach the Authorization server via the ${request.url.host}, which is the host's IP. Of course, it cannot reach it because it is within the container. So, my simple fix is to change the host_oauth2_auth_server properties to localhost (or whatever container IP you are running the Authorization server on) and it works!
Cheers,
Liem