An encoded string is a common technique used by attackers to obfuscate their malicious code or data. By decoding the string, a security operations engineer can reveal the true nature and intent of the attacker, and potentially discover indicators of compromise (IOCs) such as IP addresses, domain names, file names, etc. Decoding the string can also help the engineer to determine the type and severity of the incident, and the appropriate response actions. Therefore, decoding the string and continuing the investigation is the best option among the given choices. Saving the string to a new file and running it in a sandbox may be risky, as it could execute the malicious code and cause further damage. Running the string against VirusTotal may not yield any useful results, as the string may not be recognized by any antivirus engines. Appending the string to the investigation notes but not altering it may not provide any additional insight into the incident, and may delay the response process.Reference:

1: SANS Digital Forensics and Incident Response Blog | Strings, Strings, Are Wonderful Things

2: 5 Minute Forensics: Decoding PowerShell Payloads - Tevora

3: Known plaintext analysis of encoded strings - SANS Institute

4: Palo Alto Networks Certified Cybersecurity Entry-level Technician - Palo Alto Networks

5: 10 Palo Alto Networks PCCET Exam Practice Questions - CBT Nuggets